Shares and securities of listed companies get quoted on the Australian Stock Exchange (ASX) for trading. By quoting securities on the ASX, the companies choose to take advantage of the liquidity, term flexibility and funding diversity. In addition, quoted investment products benefit from increased transparency, raised profile and access to new investors.
What is Nasdaq? Nasdaq Stock Market is a global electronic marketplace for buying and selling securities on an automatic, transparent and speedy electronic network. It trades through a computer system rather than in a physical trading floor for the traders to trade directly between them. It is an American stock exchange located in the Financial District of Lower Manhattan in New York City. NASDAQ is owned by the company Nasdaq. Inc. and ranked second on the list of stock exchanges as per market capitalisation of shares traded. The first rank goes to the New York Stock Exchange. Nasdaq-National Association of Securities Dealers Automated Quotations, was founded in 1971 by the National Association of Securities Dealers (NASD) to avoid inefficient trading and delays. Nasdaq. Inc. company also owns the Nasdaq Nordic stock market network in addition to other exchanges. The exchange has more than 3,100 companies listed. They are the highest trade volume companies in the US market, valued more than US$14 trillion in total. Good read: NASDAQ surged up above 10,000 – Tech stocks setting a new benchmark What is Nasdaq known for? Nasdaq currently is the largest electronic stock market, and it is most well-known for its high-tech stocks. But it also has a variety of companies listed such as capital goods, healthcare, consumer durables and nondurables, energy, public utilities, finance and transportation. Nasdaq boasts of having some of the largest blue-chip companies in the world and attracts high growth-oriented companies. Its stocks are known to be volatile than those listed on other exchanges. Apart from listed stocks, Nasdaq also trades in over the counter (OTC) stocks. The ticker symbols for the listed companies’ stocks on the Nasdaq have four or five letters. The Nasdaq Composite index was initially termed as Nasdaq. It included all the stocks listed on Nasdaq stock market and also many stocks listed on Dow Jones Industrial Average and S&P 500 Index. The index has more than 3,000 stocks listed on it which include the world’s largest technology and biotech giants like Microsoft, Apple, Amazon, Alphabet, Facebook, Gilead Sciences, Tesla and Intel. Did you read: Blue-chip stocks: Value versus Growth in Covid-19 Era Companies have to meet certain criteria to get listed on the NASDAQ National Market. The entities have to meet financial, liquidity, and corporate governance-related requirements. Have to get registered with the Securities Exchange Commission (SEC) Have to maintain the stock price of at least US$1. Company’s value of outstanding stocks must total at least US$1.1 million. The small companies which cannot meet the criteria can get listed on NASDAQ Small Caps Market. Nasdaq changes the companies as the eligibility of the companies keeps changing. Image: Kalkine What are different Nasdaq indexes? Nasdaq uses an index to list its stocks like any other stock exchange. The index delivers stock performance snapshots. The New York Stock Exchange (NYSE) has the Dow Jones Industrial Average (DJIA) as its primary index; it tracks the stock price of 30 big companies. Nasdaq Composite and the Nasdaq 100 are two indices of Nasdaq. Nasdaq Composite measures the performance of more than 3,100 listed companies’ stocks trading daily on Nasdaq. Nasdaq 100 is a modified capitalisation-weighted index. This index has listed companies from various sectors, but the majority is from the technology industry. Depending on their market value, Nasdaq adds or removes the companies from its index Nasdaq 100. Both the NASDAQ Composite and the NASDAQ 100 indexes have listed companies from the United States as well as global companies. On the other hand, Dow Jones Industrial Average index does not include companies outside of the US. Did you read: Hanging Up Your Boots? Investment Strategies to Help you Relax and Build Wealth Brief history Nasdaq performance in the past has been groundbreaking and extraordinary. One of its highly regarded accomplishments is that Nasdaq was the first-ever stock exchange for offering electronic trading. It was the first to launch a website and stored all the records in the cloud. Interestingly, Nasdaq also sold its technology to other stock exchanges. Nasdaq invented the modern Initial Public Offering (IPO) as it listed venture-capital-backed companies. Initially, it merged with the American Stock Exchange. It formed the Nasdaq-AMEX Market Group, later on, the AMEX index was acquired by NYSE Euronext, and the entire data was integrated into NYSE. In 2007 Nasdaq acquired OMX which is a Swedish-Finnish financial company. Followed by which Nasdaq changed its name to NASDAQ OMX Group. NASDAQ OMX Group bought the Boston Stock Exchange and also the Philadelphia Stock Exchange which was the oldest stock exchange in the US. Also read: Nasdaq index’s Tech Titans kicks off with Bold Performances How to trade on Nasdaq? Though the New York Stock Exchange is the largest exchange by market capitalisation, Nasdaq is the largest by trading volume due to its electronic quote mechanism. Nasdaq is a dealer’s market where the public buys and sells stocks with the help of the market maker (a registered broker/dealer). The market maker provides the buy and sell quotes and takes the position in those stocks. NYSE works differently as the buyers and sellers can trade directly with each other, and a specialist allows the trade. On Nasdaq, the market maker owns inventory and trade stocks in his/her capacity. Good read: Why NASDAQ Composite index plunged 5%?
What is Wall Street? Wall Street, the Mecca of Financial Transactions in the US, is located in Lower Manhattan City of New York State. ‘Wall Street’ has become another name for financial elitism in the US. Wall Street houses the two largest stock exchanges in the world by market capitalisation, New York Stock Exchange (NYSE) and National Association of Securities Dealers Automated Quotations (NASDAQ). Wall Street is also home to various other stock exchanges, brokerage markets and banking headquarters. Notable among them are the New York Mercantile Exchange, the New York Board of Trade, New York Futures Exchange (NYFE), Goldman Sachs, etc. Brief History of Wall Street: The term ‘Wall Street’ is said to have originated from the Dutch word ‘de waalstraat’ much earlier in the 17th Century, when New York was a part of New Amsterdam and an actual wall existed at the location during 1685-1699. During that time, this area was used as a slave trading market as well as a securities exchange site. However, after the independence of the US, and in the early 19th Century, it became a site for both residential as well as business hubs. However, slowly and steadily, the business outpaced the residential part and Wall Street became the hub of all financial transactions in the US. It was only during the 20th Century that many skyscrapers came into existence on this street, the tallest of them being 40 Wall Street, which is also known as the Trump Building. Wall Street is now one of the most famous tourist attractions in the US and the Wall Street Bull attracts many tourists every day for a photo opportunity. The iconic bronze sculpture represents the aggressive financial optimistic environment and a symbol of prosperity. Image Source: Shutterstock How does Wall Street work? Wall Street houses businesses that collectively control trillions of dollars and move the markets every single day. As stated earlier, Wall Street has become a symbol of all financial transactions in the US. Wall Street functions to provide a platform for institutions to raise legitimate capital funding. The process is conducted in a centralised trading arena where those wanting to generate funds are provided with a medium of connection. The trading on Wall Street can happen in various forms - be it by issuing bonds or selling the ownership in the businesses through stocks. The government also regularises the capitalism process happening on Wall Street daily. These regulators provide the money to the productive users in a very smooth manner. Secondly, the financial hub also provides a secondary market to businesses to find investors, in order to raise capital. This bridge helps the markets move towards success. Moreover, Wall Street also houses firms which assist the investors so that they can manage their primary profession or activity. The outsourcing procedure is conducted via the professionals referred to as brokers or dealers and are registered investment advisors. They are bound by a fiduciary duty and act towards their clients’ best interest. These advisors are also asset management companies. Usually, the high earning individuals who are willing to invest and grow their wealth, take the assistance of these asset management companies and focus on generating more money for them. Wall Street can also be considered as a repository for investments across various securities. Wall Street is most commonly known for facilitating buying and selling shares. Individual investors trade the shares of outstanding stocks via their retirement and brokerage accounts. These investors are interested in the daily fluctuations of some of the major indices. Dow Jones Industrial Average and S&P 500 stock market indices have big players and investors trading every day. Image Source: Shutterstock What is the role of market makers on Wall Street? The trading revolves around the market makers at Wall Street and they usually facilitate the action in the market and earn a fee for providing their services. A lot many factors decide the movement of prices of traded securities. A mix of factors like sector news, management changes, company performances etc. decide if the prices are going up or down. However, market makers are also one of the biggest factors which have an impact on the share prices. There are individual professionals on the exchange floors facilitating these factors. The electronic communication networks are also part of market makers. Each transaction conducted on the securities exchange requires a party to take the opposite side.
Pink Sheets is a list compiled abd published by National Quotation Bureau. It comprises over-the-counter (OTC) stock bids, ask prices and the dealers that exchange them as these companies are not eligible to be listed and trade on formal exchanges (such as the NYSE, Nasdaq, AMEX) due to their small size or inability to file with the Securities Exchange Commission (SEC).