What is Nasdaq? Important Nasdaq indices in investing
Nasdaq plays an important role in the innovation and advancement of global financial markets. Besides, Nasdaq also develops stock indices for investment. So what is Nasdaq? Which Nasdaq indices should I pay attention to?
Nasdaq is an American stock exchange established in 1971. Nasdaq's full name is "National Association of Securities Dealers Automated Quotations".
Nasdaq ushered in the era of electronic trading platforms, facilitating listings for companies around the world. Stock codes on Nasdaq belong to many industries. However, the focus of the floor is technology companies because the capitalization of this field is large.
Some leading companies are listed on Nasdaq such as Apple, Amazon, Google, Facebook (Meta)... The Nasdaq stock exchange plays an important role in the US economy in particular, and reflects the trends and developments of the global financial market in general.
Market segmentation and listing standards on Nasdaq
Nasdaq has three market segments where companies can list. Each segment has its own standards and positioning based on requirements related to finance, management and transparency.
- Nasdaq Global Select Market (NASDAQ-GS): for large cap companies.
- Nasdaq Global Market (NASDAQ-GM): for mid-cap companies.
- Nasdaq Capital Market (NASDAQ-CM): for small cap companies.
Companies that want to list on Nasdaq need to submit financial statements audited according to international standards or US accounting standards (US GAAP - Generally Accepted Accounting Principles) and register with the US Securities and Exchange Commission (US GAAP). SEC).
Important Nasdaq indices to know
The Nasdaq indices are created and managed by Nasdaq, Inc. - financial corporation operates 3 stock exchanges in the US: Nasdaq, Philadelphia and Boston and 7 European stock exchanges: Nasdaq Copenhagen, Nasdaq Helsinki, Nasdaq Iceland, Nasdaq Riga, Nasdaq Stockholm, Nasdaq Tallinn and Nasdaq Vilnius.
Nasdaq, Inc. not only operates the trading floor but also develops the Nasdaq Composite Index, Nasdaq 100 Index, Nasdaq Biotechnology Index and Nasdaq Financial 100 Index. Among them, the most important are the first two indicators.
What is Nasdaq Composite Index?
Nasdaq Composite Index is a stock index representing the performance of all companies listed on the Nasdaq exchange (more than 3000 stock codes). This is one of the most closely watched indexes, as it includes most industries and companies large and small globally.
An increase or decrease in the Nasdaq Composite Index affects:
- Psychology and decisions of individuals and investment funds: rising indexes help increase optimism in the market and vice versa.
- Reflects changes in the value of companies listed on the exchange, affecting the ability to raise capital, buy back shares or conduct mergers and acquisitions.
- Reflects the health of the general economy. Increases and decreases may affect changes in interest rates or other financial instruments.
What is Nasdaq 100 Index?
Nasdaq 100 Index (Nasdaq-100) is a stock index that includes the 100 largest non-financial companies on the Nasdaq exchange. The index includes companies from the information technology, communication services, biotechnology and consumer sectors, but excludes companies from the financial sector.
*Non-financial company is any company operating outside the financial sector, excluding industries such as banking, insurance, investment, etc.
Technology companies make up a large portion of the Nasdaq 100, so the index's rise and fall will clearly reflect the performance of top technology companies. At the same time, it is also the basis for investment products such as Invesco QQQ Trust ETFs (QQQ) and derivative products.
Nasdaq operating hours
Nasdaq operates in the Eastern Time Zone of the United States, specifically as follows:
- Standard trading hours: 9:30 am to 4:00 pm ET.
- Pre-Market Trading: 4:00 a.m. to 9:30 a.m. ET.
- Post-Market Trading: 4:00 pm to 8:00 pm ET.
Note:
Trading sessions take place Monday through Friday and do not include stock holidays (days the stock market is closed). These dates are usually important national holidays and may vary by country and exchange.
In the US, stock exchanges like NYSE and Nasdaq are closed during holidays such as Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, New Year's Day...
Vietnam's time zone (GMT+7) is 11 to 12 hours ahead of the US Eastern time zone (ET, GMT-4 or GMT-5 depending on the season). Investors in Vietnam need to pay attention to adjust their trading schedules to suit the floor.
