Knowledge Base
Index Trading
Options Trading
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About NASDAQ Indexes
Description: A short overview of the NASDAQ indexes and
market sectors that are covered by one of the largest electronic stock
exchanges.
The NASDAQ Exchange is one of the largest electronic exchanges in the world and
has gone far beyond the US market. Many indexes have been introduced over the
last couple of years on this exchange. These indexes cover not just the NASDAQ
market and the US economy, but characterize different markets all over the
globe. The NASDAQ 100 and NASDAQ Composite indexes are the most popular indexes
and most recognized from this group by traders. The NASDAQ Biotechnology index
and other older indexes are also popular. The financial crisis in 2008 has
caused the NASDAQ 100 Financial, NASDAQ Bank and NASDAQ Other Financial indexes
widely to be analyzed as well.
A short description of NASDAQ Indexes
The NASDAQ Composite index comprises the public companies traded on the
NASDAQ Exchange and is used by analysts in conjunction with the NYSE Composite
and Amex Composite indexes to get a complete picture of the US economy.
The NASDAQ 100 index is the most popular index. It includes the largest
non--financial domestic and international publicly-traded companies on the
NASDAQ Stock Exchange. In contrast, the NASDAQ 100 Financial index covers the
100 largest financial companies and was launched at the same time as the NASDAQ
100 index.
The NASDAQ Biotechnology index is based on the largest companies in the
pharmaceutical and biotechnology industries.
With many NASDAQ indexes, you may find the pair of Equal Weighted index which is
comprised of the same stocks that the main index is. The only difference between
them is the method used to calculate the index value.
Among the NASDAQ indexes, you can find indexes that cover the following US
market sectors: Telecommunications, Biotechnology, Industrial, Insurance, Health
Care, Technology, Ex-Technology, Computer, Financial, Banks, Neurotech, and
Internet. In addition, there are many indexes that cover foreign markets. Such
indexes as NASDAQ China Index, NASDAQ-Canada Index and NASDAQ Israel Index cover
non-US markets.
At the same time, you can find indexes that cover domestic and international
companies that are traded not only in the US market, but all over the world. As
an example, the NASDAQ OMX 100 index is comprised of companies that are traded
on both the US market and European markets.
As you can see, the wide range of indexes allows NASDAQ to cover sentiment in
each market sector, by delivering to consumer the complete picture of not only
the US economy, but also the economy of Canada, China, and Israel, as well as
monitoring the health of the European economy.
At present, more and more public companies are moving from the trading floor
into computerized (over the counter) trading and the importance of the NASDAQ
indexes is growing. Even if you are not involved in index trading, before
beginning trading, it is highly recommended that you consider a brief analysis
of the market sector to which the selected stocks belong. With the variety of
index products on the NASDAQ, this should not be a problem.
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