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Fool Podcasts. New Ventures. Search Search:. Dan Caplinger. Looking to invest? OTC Markets Where stocks that aren't listed on the major exchanges can be traded.
What are Nasdaq trading hours? The Nasdaq closes for a handful of holidays each year, as shown below:. What is the NYSE? The New York Stock Exchange has two primary functions: It provides a central marketplace for investors to buy and sell stock.
It enables companies to list their shares and raise capital from interested investors. Recent articles. Alphabet in 4 Charts: Buy or Sell? They tend to be large, well-known companies like Coca-Cola and Verizon. The Dow weighs stocks with higher share prices more heavily than the Nasdaq does.
That means that its performance will be swayed by companies that haven't split their shares and consequently have maintained higher stock prices. Stock indexes are lists of stocks that indicate the performance of the selected stocks.
Some indexes list all the stocks listed on an exchange, while others only list stocks picked by the index managers. A company with a lot of stock still held by a founding family member won't have as much influence on the index. It also tracks other geographic sub-areas, such as the Gulf Cooperation Council and global small-cap, large-cap, and mid-cap stocks. The Nasdaq Composite has continued climbing steadily since late , setting new record highs consistently.
On August 22, , Nasdaq shut down all trading from p. EDT to p. The " flash crash " was caused when one of the NYSE servers had trouble communicating with a server at Nasdaq. The server provided data about stock prices.
Despite several attempts, the problem couldn't be resolved, and the stressed server at Nasdaq went down. Flash crashes are not the same as stock market crashes. They don't have the power to cause a recession and don't even last long enough to cause a market correction. On May 18, , trading on Facebook's initial stock offering was delayed for the first 30 minutes. Traders could not place, change, or cancel orders. Nasdaq admitted that technical errors had caused the delay.
On March 10, , the Nasdaq reached a pre-recession high of 5, This created a bubble, where the prices of any type of tech or internet stock rose high above reasonable valuations.
The tech bubble was driven in part by the Y2K scare, where it was feared that computer systems were going to crash when the date rolled over to the new millienia. Most companies and many individuals bought new computer systems. They were afraid that old software might not be able to transition from dates that started with "19" to dates that started with " Computer and software manufacturers warned everyone to update their computer systems so they wouldn't fail at the stroke of midnight on January 1, This caused sales to soar, making it seem that any tech-related company was sure to profit.
As it turned out, most computer systems were fine. If you buy or sell equities, there are many great options for you to trade on the Nasdaq. Learn more about what the Nasdaq is, how it works, and how it compares to the NYSE so you can make smart investing choices.
Unlike some other exchanges, the Nasdaq has no physical trading floor. All of its stocks are traded electronically through an automated network of computers—this was its mission from the beginning.
Nasdaq was the world's first fully electronic stock market in The Nasdaq attracts some of the largest blue-chip companies in the world. Many of its listings represent high-tech software, computer, and internet companies, although other industries also trade on the Nasdaq.
Because it attracts highly growth-oriented companies, its stocks tend to be more volatile than those on some other exchanges. As the world's second-largest stock exchange based on market capitalization, the Nasdaq trades listed stocks as well as over-the-counter OTC stocks. Stock ticker symbols on the Nasdaq generally have four or five letters. In addition to being the first exchange to offer electronic trading, it was the first exchange to launch a website, store records in the cloud, and sell its technology to other exchanges.
The new company, Nasdaq OMX Group, also offers trading in exchange-traded funds, debt, structured products, derivatives , and commodities. The Nasdaq lists nearly 3, companies and boasts the highest trade volume in the U.
From the beginning, the Nasdaq was designed to provide automated quotations. In the years following its founding, it regularly facilitated over-the-counter OTC trading, so much so that Nasdaq became synonymous with OTC and was often referred to as an OTC market by media and trade publications. Later, it added automated trading systems that could create trade and volume reports; it also became the first exchange to offer online trading.
As a dealer's market, all trades that investors make over Nasdaq's electronic exchanges are completed through dealers—also known as market makers—rather than directly via auctions. Additionally, Nasdaq offers traders "pre-market" and "post-market" hours. Pre-market hours are from 4 a. Good Subscriber Account active since Shortcuts. Account icon An icon in the shape of a person's head and shoulders.
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Jim Probasco. The Nasdaq is the world's largest electronic stock exchange with two closely watched indexes: the Nasdaq Composite and the Nasdaq Technology, consumer services, and other growth stocks dominate Nasdaq and have caused it to outperform other stock markets in recent years.
The easiest way for individual investors to participate in the Nasdaq's volatile but high-performing stocks is via index funds. Visit Business Insider's Investing Reference library for more stories. A freelance writer and editor since the s, Jim Probasco has written hundreds of articles on personal finance and business-related content, authored books and teaching materials in the fields of music education and senior lifestyle, served as head writer for a series of Public Broadcasting Service PBS specials and created radio short-form comedy.
As managing editor for The Activity Director's Companion, Jim wrote and edited numerous articles used by activity professionals with seniors in a variety of lifestyle settings and served as guest presenter and lecturer at the Kentucky Department of Aging and Independent Living Conference as well as Resident Activity Professional Conferences in the Midwest. He is past president of an educational foundation that serves teachers and students in the Kettering Ohio City School District.
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