What Is the History of the Nasdaq Market?


Quick Answer

The National Association of Securities Dealers founded the Nasdaq in 1971 as the world's first electronic stock market, states Business Reference Services. The Nasdaq split off into a shareholder-owned, for-profit corporation in 2000 and merged with OMX, a Swedish exchange operator, in 2007. The combined Nasdaq OMX then bought the Philadelphia stock exchange later in 2007.

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Full Answer

After being established in 1971, Nasdaq attracted many young companies, such as Microsoft, Apple, Cisco and Dell, explains Nasdaq. Though the Nasdaq exchange dates back only to 1971, the Nasdaq corporation also prides itself on the legacy of older exchanges that it now owns. These include the Philadelphia Stock exchange, established in 1790; the Copenhagen Exchange, established in 1808; and the Boston Exchange, established in 1834.

The Nasdaq was the world's first electronic stock exchange, as opposed to traditional auction stock exchanges, such as the New York Stock Exchange, explains Investopedia. In auction exchanges, specialized brokers trade specific stocks in person on a large stock floor. On electronic exchanges, such as the Nasdaq, traders connect through computers over telecommunications networks, posting their bid and the ask prices for other traders to see.

Traders use the Nasdaq to trade not only stocks, but many other securities, including real estate investment trusts and exchange-traded funds, explains Investopedia. Nasdaq may also refer to the Nasdaq composite index, which tracks the performance of companies traded on the Nasdaq exchange.

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