NASDAQ is the first electronic stock market since the year 1971. Today NASDAQ
serves million of investors around the globe. It is the fastest growing stock
market in the US, and the leading American market for foreign listings. NASDAQ
is a screen-based market, operating in an efficient, highly competitive electronic
trading environment. Now, almost 5,100 companies including small, growing companies
as well as many large corporations that have become household names, trade their
securities on this electronic market.
NASDAQ operates using today's information technologies and a system under which
"Market Makers" compete against each other for the best buying and selling prices.
NASDAQ's Market Makers use their own capital to buy and sell NASDAQ securities.
The combined competitive activity and capital provide active, continuous trading,
orderly markets and immediacy of execution for large and small investors alike.
NASDAQ has augmented the best elements of a dealer market with recent enhancements
to its trading system. For example, these improvements now enable NASDAQ to route
investor orders to electronic communications network (trading systems which bring
additional customer orders in to NASDAQ), a manner similar to an auction market.
The NASDAQ Stock Market is comprised of The NASDAQ National Market and The NASDAQ
Small Cap Market Each has it own set of financial requirements that a company must
meet to list its securities and each has its own set of entry and annual listing
fees for continued listing.
The NASDAQ National Market's companies include some of the largest, best known
companies in the world and each must meet demanding financial and corporate
governance standards to be listed. The National Market currently lists more
than 41,000 securities.
The NASDAQ Small Cap Market is the smaller capitalization tier of NASDAQ and now
number just over 1,400 issues. As such, the financial criteria for listing are
not as stringent as for the NASDAQ National Market. The corporate governance standards,
however, are the same. As small cap companies grow, they often move up to the NASDAQ
National Market.
NASDAQ allow multiple market participants, especially NASDAQ Market Makers, who help
to stimulate demand for a company's stock while maintaining an orderly market and
functioning under tight controls. This structure creates healthy competition among
NASDAQ participants.
In some way, the multiple distributors help meet increase demand for a company's
product, NASDAQ market participants help create increasing opportunities for a
company's stock to be bought and sold in an orderly fashion. It increases visibility
in the marketplace and market qualities that are conductive to immediate and
continuous trading.
NASDAQ Market Makers provide depth of market to companies by standing ready to
commit capital to stocks in which they are registered and by providing immediate
and continuous trading in a company's stock. Buyer and seller s are willing to
trade more frequently and investors are more willing to hold securities, because
they know they can sell them more readily.
NASDAQ encourages trading among a virtually unlimited number of market participants.
NASDAQ market structure offers an environment which facilitates greater liquidity.
It means that stocks can be bought and sold without dramatic fluctuations in price.
Market Makers enhances NASDAQ's liquidity by providing investors with ready access to
capital and nearly uninterrupted trading in their stock. The aggressive competition
for orders fostered among NASDAQ's Market Makers and all market participants' helps
to ensure investors the best price for the stocks they trade.
For investors and companies the ability to view trade and quotation information is
referred to as transparency. On NASDAQ, all Market Maker bid and ask quotations in
a given security plus orders from ECNs are broadcasted over the network for all
market participants to see, making a "transparent" market place.
NASDAQ facilitates capital formation in the public and private sector by developing,
operating and regulating the most liquid, efficient and far securities markets to
benefit and protect the investor. By continuing to shape the new world of investing,
NASDAQ is challenging the very definition of what a stock market is and what it can be.
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