|
 |
Description - NASDAQ Exchange
Stock Market
Investing
What Makes NASDAQ Unique?
As the world's largest electronic stock market, NASDAQ® is
not limited to one central trading location. Rather, trading is executed
through NASDAQ's sophisticated computer and telecommunications network,
which transmits real-time quote and trade data to more than 1.3 million
users in 83 countries. Without size limitations or geographical
boundaries, NASDAQ's "open architecture" market structure allows a
virtually unlimited number of participants to trade in a company's stock.
Today, NASDAQ lists the securities of nearly 4,100 of the world's
leading companies and each year, continues to help hundreds of companies
successfully make the transition to public ownership.
Who Trades NASDAQ Stocks?
 Trading
on NASDAQ is not limited to any fixed number of participants. This allows
a large number of firms with widely different business models and trading
technologies to connect to the NASDAQ network and compete on an equal
basis. Rather than forcing investors to go through a single financial firm
to buy or sell stocks, NASDAQ links up a variety of competitors and lets
participants choose with whom they are going to trade. All firms trading
NASDAQ stocks must be certified with the Securities and Exchange
Commission (SEC) and registered with NASDAQ and NASD Regulation®.
Following are examples of the kinds of firms trading NASDAQ stocks:
- Market Makers
 Key
to NASDAQ's market structure are a core group of financial firms called
market makers. More than 500 market making firms trade on NASDAQ, acting
as distributors for NASDAQ-listed securities. Also known as dealers,
market makers are unique in that they commit their own capital to
NASDAQ-listed securities — then turn around and re-distribute the stock
as needed. They are required at all times to post their bid and ask
prices in the NASDAQ network where they can be viewed and accessed by
all participants. By being willing to buy or sell stock using their own
funds, market makers add liquidity to NASDAQ's market, ensure that there
are always buyers and sellers for NASDAQ-listed securities, and enable
trades to be filled quickly and efficiently.
- ECNs
In addition to market makers, the NASDAQ network also connects
alternative trading systems into the market, such as electronic
communication networks (ECNs). ECNs provide electronic facilities that
investors can use to trade directly with each other. As NASDAQ market
participants, ECNs display either one-sided or two-sided quotes that
reflect actual orders. Additionally, they provide investors with an
anonymous way to enter orders into the marketplace. Unlike market
makers, ECNs operate simply as order-matching mechanisms and do not
maintain inventories of their own.
- Order-Entry Firms
Order-entry firms are also NASDAQ market participants. Order-entry firms
enter and execute orders through NASDAQ on behalf of retail and
institutional customers and other broker/dealers, but they do not
maintain buy or sell price quotations in NASDAQ-listed securities. Like
ECNs, order-entry firms do not commit capital to stocks, but they do
increase the competition among market participants — helping to keep
stock prices competitive and adding to the market's liquidity.
How Does NASDAQ's Market Structure Benefit Listed
Companies?
 Through
its unique framework of multiple market participants, NASDAQ provides
listed companies' securities with ready access to investors, visibility in
the marketplace, and market conditions that promote immediate and
continuous trading:
- Liquidity
Liquidity is best defined as the ease with which stocks can be bought
and sold in the market. By encouraging trading among a virtually
unlimited number of market participants, NASDAQ offers an environment
that facilitates greater liquidity.
- Depth of Market
Depth of market refers to the total amount of money market makers have
invested in a single security and is related to the number of market
participants trading in the security. However, even a few market
participants can provide abundant depth of market by committing to buy
or sell large quantities of a security. Knowing there is depth of market
can reassure investors of a stock's marketability, especially during
periods of heavy trading volume.
- Transparency
Transparency, the ability to view investors' buy and sell orders at
different price levels, is crucial to the decision-making process in
securities trading. NASDAQ's open market structure offers a level of
transparency not found on other major U.S. markets. On NASDAQ, all bid
and ask quotations in a given security are broadcast over the network.
All NASDAQ market participants — regardless of whether they are
professional traders — can see the same information.
- Price Efficiency
In securities trading, as in most industries, competition is one of the
most important factors in creating price efficiencies. The aggressive
competition for orders fostered among NASDAQ's market participants helps
to ensure that investors receive the best prices for the securities they
trade.
nasdaq.com
nasdaq.com is one of the most popular financial sites on
the Web. Averaging more than seven million page views per day, nasdaq.com
offers unprecedented visibility to listed companies. Investors can log on
to nasdaq.com and see how NASDAQ, Dow Jones, and the S&P 500 are
performing, scan the latest news and fund commentary and get quotes for
stocks, mutual funds, and options on major U.S. markets. With a wealth of
investor services, users are encouraged to visit the following links for
an overview of the site or to view the services available.
NASDAQ
MarketSiteS
Located in the heart of New York's Times Square, NASDAQ's MarketSite Tower
soars seven stories high and is the largest video screen in the world.
CNBC, CNNfn, Bloomberg, CBS MarketWatch — these and other financial news
media broadcast live throughout the day from the MarketSite's Broadcast
Studio, putting NASDAQ listed companies front and center before millions
of investors.
Unparalleled Service
Companies can expect unparalleled service when they list on
NASDAQ. Each NASDAQ company has a single point of contact: their NASDAQ
Director, who serves as a link to an extensive portfolio of services.
Directors provide day-to-day assistance and can offer valuable insight on
investor relations, market and industry issues.
Executive Programs
NASDAQ-listed company executives are invited to participate
in a variety of programs designed to present top managers with timely
information and networking opportunities. NASDAQ programs include a wide
range of topics — such as industry sector specific seminars and investor
relations forums — that provide companies with the tools they need to be
public.
NASDAQ OnlineSM
Designed for senior executives at NASDAQ listed companies,
NASDAQ Online is a
one-of-a-kind strategic planning tool. It provides market data on all
US-traded companies and real-time quotes for NASDAQ stocks. Plus, there's
key information on institutional ownership, research coverage, performance
ratios and more. All data is continually updated and available in a
single, integrated source. And NASDAQ Online is free to listed companies.
Global Vision
NASDAQ is building the world's first truly global stock
market — digital and Internet-accessible, open to anyone anywhere in the
world, 24 hours a day. NASDAQ has already broken new ground in
Europe,
Hong Kong,
and Canada
, with additional plans for Asia, Latin America, and the Middle East. By
reaching out around the globe, NASDAQ is creating new links to additional
capital and an even broader pool of investors.
- Related Links:
-
NASDAQ Canada
- NASDAQ Europe
|
|
|
