In the grand landscape of global financial markets, Nasdaq is not merely the name of a stock exchange; it is a symbol—representing technological progress, the spirit of innovation, and the pulse of the future economy. For any modern trader aiming to grasp the trends of our time, a deep understanding of this vibrant market is indispensable. From its revolutionary origins and unique market structure to the core indices closely watched by traders, the vast array of trading instruments, and the invisible forces shaping its price fluctuations, the world of Nasdaq is both complex and fascinating.
In this fast-paced market, understanding its operational mechanics is a crucial first step for both novices and seasoned traders. This guide will take you on a comprehensive journey, systematically dissecting every facet of Nasdaq.
How Did Nasdaq Become Synonymous with Tech Innovation?
To truly grasp the core essence of Nasdaq as a global innovation hub, we must trace back to its disruptive origins. Its history is not just a series of events on a timeline but a technological revolution that fundamentally reshaped the financial market landscape, creating a natural home for the world’s most forward-thinking companies.
The Evolution from a Quotation System to a Global Electronic Exchange
The Nasdaq Stock Market was officially founded on February 8, 1971, by the National Association of Securities Dealers (NASD). Its name, Nasdaq, was originally an acronym for National Association of Securities Dealers Automated Quotations. Its creation stemmed from a directive by the U.S. Securities and Exchange Commission (SEC) to automate and regulate the then-opaque over-the-counter (OTC) market.
Initially, Nasdaq was not a trading platform but a revolutionary electronic quotation system. While traditional exchanges relied on delayed ticker tapes, Nasdaq allowed market makers to update their bid and ask prices in real-time via electronic terminals, dramatically increasing market transparency and effectively narrowing bid-ask spreads. This fully electronic structure, with no physical trading floor, was a fundamental disruption of the traditional exchange model.
Over time, Nasdaq’s functions expanded to include trade and volume reporting and automated trading systems. In 2000 and 2001, its parent company, NASD (now the Financial Industry Regulatory Authority, FINRA), sold its stake, and Nasdaq subsequently went public on its own exchange on July 2, 2002, under the ticker symbol NDAQ. Finally, in 2006, it officially received a license to operate as a national securities exchange, transforming from a quotation system. To expand its global footprint, Nasdaq merged with the Nordic exchange group OMX in 2007 to form the NASDAQ OMX Group, which was renamed Nasdaq, Inc. in 2015.
Unveiling Nasdaq’s Market Operations: Why is the Market Maker System Crucial?
Nasdaq employs a Dealer Market system, also known as a Negotiated Market, which is fundamentally different from the Auction Market system of the New York Stock Exchange (NYSE). At the NYSE, each stock is typically handled by a single Designated Market Maker (DMM) who facilitates trades on a physical trading floor.
In contrast, Nasdaq’s model is decentralized. It introduces multiple, competing market makers for each listed security. These market makers are securities firms or financial institutions whose core duty is to provide continuous liquidity to the market using their own capital and inventory. Specifically, market makers must simultaneously quote prices at which they are willing to buy (Bid) and sell (Ask) the stocks they cover during trading hours, and they must guarantee to execute a certain number of shares at these prices.
This competitive structure is key to the efficiency of the Nasdaq trading system. Dozens of market makers vie for investor order flow, constantly adjusting their quotes to offer the tightest possible Bid-Ask Spread, which naturally promotes more efficient price discovery and lower transaction costs.
This competitive market maker system is a tangible manifestation of Nasdaq’s decentralized, technology-first philosophy. The specialist system at the NYSE is inherently centralized, revolving around a single point of contact on the trading floor. Nasdaq’s model, however, is a distributed network of numerous electronic participants with no single control center, a structure that aligns with modern technological systems like the internet. This structure is not just a technical detail but a part of its core identity. It creates a more “democratized” and scalable market where any qualified institution can compete on a level playing field. This inherent philosophy makes Nasdaq a more attractive listing platform for innovative companies that are themselves challenging traditional, centralized industries.
Nasdaq’s Listing Tiers: What’s the Difference Between Global Select, Global Market, and Capital Market?
To attract and serve companies at different stages of development, Nasdaq has strategically divided its market into three distinct tiers: the Nasdaq Global Select Market, the Nasdaq Global Market, and the Nasdaq Capital Market. All three tiers share the same stringent corporate governance standards, but the initial listing requirements for financial and liquidity metrics become progressively higher.
Nasdaq Global Select Market: This is Nasdaq’s top-tier market, with financial and liquidity standards that are among the most rigorous in the world. Listing on this market is considered a hallmark of corporate excellence and industry leadership.
Nasdaq Global Market: As the middle tier, this market is geared towards mid- to large-cap companies that have already achieved considerable scale and global presence.
Nasdaq Capital Market: This is the entry-level market tailored for small-cap and emerging companies, with its core objective being to help these high-potential firms raise the capital needed for growth.
This three-tiered structure is more than just a simple classification; it embodies Nasdaq’s unique business model of creating a “promotion system” for corporate growth. While traditional exchanges often focus on established, large-cap enterprises, Nasdaq’s tiered design offers a clear development path for companies at all stages of their life cycle. A promising startup can complete its Initial Public Offering (IPO) on the Capital Market, and as its business grows and market capitalization expands, it can gradually “ascend” to the Global Market and ultimately reach the pinnacle of the Global Select Market. This model transforms the role of the exchange from a mere listing venue into a long-term growth partner for companies, significantly reinforcing Nasdaq’s brand image as the premier platform for innovation and growth.
Interpreting the Core Metrics: Which Nasdaq Index Are You Trading?
When you hear “Nasdaq” in financial news or trader communities, it’s crucial to ask a key question: which one are they referring to? The exchange hosts two widely known major indices that, while related, serve distinctly different purposes. Confusing the two is a common pitfall, and clearly distinguishing them is the first step toward informed trading.
Nasdaq Composite Index – The Broad Market Thermometer
The Nasdaq Composite Index, often identified by its ticker symbol ^IXIC, is a broad measure of the overall performance of the Nasdaq stock market.
Constituents: The index includes almost all common stocks listed on the Nasdaq Stock Market, totaling over 2,500 companies, sometimes cited as more than 3,000. It includes not only U.S. domestic companies but also a large number of international firms, which is a notable difference from the S&P 500 Index.
Weighting Method: It is a market-capitalization weighted index. This means that companies with larger market caps, such as Apple and Microsoft, have a greater impact on the index’s overall movement.
Primary Use: Its core function is to serve as a market thermometer, reflecting the health and overall trend of the entire Nasdaq exchange. When financial media report that “the Nasdaq index rose/fell today,” they are usually referring to this composite index.
Nasdaq-100 Index – The Arena for Tech Giants
In contrast to the broad coverage of the Composite Index, the Nasdaq-100 Index, often identified by its ticker symbol NDX, is a more refined and focused benchmark.
Constituents: The index is composed of the 100 largest non-financial companies listed on the Nasdaq Stock Market by market capitalization.
Exclusion of Financial Companies is one of its most fundamental design principles. This allows the index to more purely reflect the performance of growth-oriented sectors like technology, biotechnology, retail, and telecommunications.
Weighting Method: It uses a modified capitalization-weighted methodology. This “modification” is crucial: it employs a special set of rules to cap the influence of the largest constituents, preventing the index from being completely dominated by a few mega-cap companies.
Index Adjustments: The Nasdaq-100 is reviewed quarterly and undergoes an annual rebalancing of its components in December. Additionally, a Special Rebalance is triggered when the index’s concentration levels exceed preset thresholds. A prime example was the special rebalance in July 2023, which was triggered after the soaring stock prices of the “Magnificent Seven” caused the aggregate weight of stocks exceeding 4.5% to surpass the 48% cap. This adjustment only redistributed weights and did not add or remove any constituents.
Primary Use: It serves as the underlying benchmark for some of the world’s most popular and liquid Nasdaq-related trading products, including the renowned Invesco QQQ ETF and the E-mini (NQ) and Micro E-mini (MNQ) stock index futures.
The Nasdaq-100 is not merely a subset of the Composite Index; it is more like a financial product meticulously designed for trading. First, the exclusion of financial stocks like banks and insurance companies is a deliberate decision aimed at filtering out traditional “old economy” sectors, thereby sharpening the index’s focus on technological innovation and high-growth areas to provide investors with a purer thematic investment tool for innovation. Second, its modified weighting and rebalancing mechanisms are core to its built-in risk management. Without this design, the index could become a proxy for the stock prices of just a few top companies. The special rebalance event in 2023 vividly demonstrated the effectiveness of this mechanism, ensuring the index always represents 100 leading companies, not just five or six. It is this curated and risk-managed structure that makes the Nasdaq-100 a more stable and liquid underlying asset than the Composite Index, making it extremely suitable for creating derivatives like ETFs and futures. Therefore, we can understand it this way: the Composite Index is the “thermometer” for the entire exchange, while the Nasdaq-100 is the “engine” that traders actually drive.
How to Participate in the Pulse of the Nasdaq Market?
After clearly distinguishing Nasdaq’s key indices, we naturally move to the practical level: how can individual traders or investors gain exposure to the Nasdaq-100 index? The market offers a variety of financial instruments, each with its unique attributes, advantages, and risks, to cater to different trading strategies, capital sizes, and levels of expertise.
Exchange-Traded Funds (ETFs): The Most Popular Entry Method
Exchange-Traded Funds (ETFs) are funds that trade on stock exchanges like individual stocks, aiming to closely track the performance of a specific index. For investors looking to participate in the Nasdaq market, ETFs offer a direct and convenient pathway.
Core Product: The most famous and liquid ETF tracking the Nasdaq-100 is undoubtedly the Invesco QQQ Trust (Ticker: QQQ). It is almost synonymous with the Nasdaq-100 index and is widely followed and traded by investors globally.
Other Options: Besides QQQ, the market offers several variations to meet different needs. For example, the Invesco NASDAQ 100 ETF (QQQM) has a lower expense ratio and a smaller share price, making it more attractive for smaller investors. The Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE) employs an equal-weight strategy, allocating weight evenly among the 100 constituents, which effectively reduces the risk of over-concentration in large-cap tech stocks.
Thematic ETFs: In addition to directly tracking the index, investors can make precise investments in specific high-growth sectors within Nasdaq through Thematic ETFs. For instance, ETFs in the biotechnology sector (like IBB, BBH, ARKG) and the semiconductor industry (like SOXX) include a large number of Nasdaq-listed companies, allowing investors to focus on the sub-sectors they are bullish on.
Index Futures: The Leveraged Tool for Professional Traders
Index Futures are standardized financial contracts that allow traders to buy or sell a stock index at a predetermined price on a specific future date, thereby speculating on or hedging against the future direction of the index.
Main Contracts: Traded on the Chicago Mercantile Exchange (CME), there are two main sizes for Nasdaq-100 index futures: the E-mini Nasdaq-100 (Symbol: NQ) and the Micro E-mini Nasdaq-100 (Symbol: MNQ).
Contract Specifications: For the standard NQ contract, a 1-point move in the index represents a $20 change in value. The MNQ contract is one-tenth the size of the NQ, with a 1-point move representing $2, making it accessible for retail traders with smaller capital. The minimum price fluctuation (tick size) for both contracts is 0.25 index points, corresponding to a value change of $5 (NQ) and $0.50 (MNQ), respectively.
Core Advantages:
High Leverage: Futures trading operates on a margin system, allowing traders to control a full contract with only a small fraction of its total value (margin), which greatly amplifies capital efficiency and potential returns.
Nearly 24-Hour Trading: The futures market is open for trading almost 24 hours a day, five days a week, enabling traders to react in real-time to global news and events that occur outside of U.S. market hours.
Excellent Liquidity: NQ futures are one of the most liquid financial instruments in the world, with massive daily trading volume, ensuring that orders can be filled quickly and efficiently.
Tax Advantages (U.S. Region): Under Section 1256 of the U.S. Internal Revenue Service (IRS) code, gains from trading stock index futures often receive favorable tax treatment, with 60% treated as long-term capital gains and 40% as short-term, which is highly beneficial for short-term traders.
Contracts for Difference (CFDs): The Double-Edged Sword of Flexible Trading
A Contract for Difference (CFD) is a financial derivative, an agreement between a trader and a broker to exchange the difference in the value of an asset (like the Nasdaq-100 index) from the opening to the closing of a position.
No Physical Ownership: The trader never actually owns the underlying asset; they are merely speculating on its price movements.
Trading Flexibility: CFDs make it exceptionally simple and direct to go long (expecting the price to rise) or go short (expecting the price to fall).
High Leverage: Similar to futures, CFDs are highly leveraged products. This means that potential profits and losses are magnified, making them extremely risky.
Trading Costs: The primary costs of CFD trading come from the spread (the difference between the bid and ask price) and the overnight financing charges required to hold a position overnight.
Regulatory Notice: It is important to note that while CFDs are widely popular in Europe, Asia, and other regions, they are banned for retail traders in the United States.
The choice of a trading instrument is itself a strategic decision, deeply reflecting a trader’s goals, time frame, risk tolerance, and capital. For long-term investors and beginners, ETFs provide direct, non-leveraged exposure with a simple mechanism and relatively low risk, making them an ideal starting point. For active day traders and swing traders, futures combine high leverage, deep liquidity, and nearly 24-hour trading, making them a professional tool for those seeking precision and speed. CFDs are designed for short-term speculators; their extreme flexibility and leverage cater to the demand for using small capital to pursue quick returns, but their high potential costs and the immense risks of leverage make them suitable only for experienced traders who have mastered risk management. These three form a clear hierarchy based on risk and complexity, allowing different types of market participants to find a suitable way to engage in the Nasdaq-100 market game.
What Are the Key Forces Influencing Nasdaq’s Trend?
The value of the Nasdaq index does not fluctuate in a vacuum. Every rise and fall is the result of a complex interplay between the immense forces of the macroeconomy, the financial health of its constituent companies, and the often-unpredictable collective psychology of humanity. To navigate this market, one must understand the winds and currents that drive it.
Macroeconomic Bellwethers: Fed Rates, Inflation (CPI), and Employment Reports (NFP)
As an index dominated by growth stocks, Nasdaq is exceptionally sensitive to changes in macroeconomic data, especially indicators that influence the monetary policy of the U.S. Federal Reserve.
Federal Reserve Interest Rate Policy: Nasdaq is highly sensitive to interest rate changes. When the Fed raises interest rates, corporate borrowing costs increase, and more importantly, the discount rate used by investors to value stocks also rises. This is particularly damaging to the valuations of growth-oriented tech companies, as their value is largely based on expectations of distant future earnings. Conversely, rate cuts are generally seen as a major positive for Nasdaq.
Inflation Data (CPI): The Consumer Price Index is a core inflation indicator closely watched by the Fed. Higher-than-expected CPI data often triggers market concerns that the Fed may need to adopt a tightening policy (like raising rates) to cool the economy, which puts pressure on Nasdaq.
Employment Report (NFP): The Non-Farm Payrolls report is a key measure of the health of the U.S. economy. A strong NFP report is a double-edged sword: on one hand, it indicates economic prosperity, which is good for corporate profits; on the other hand, an overly strong job market can also spark inflation expectations, thereby increasing the likelihood of a Fed rate hike and creating downward pressure on Nasdaq.
Corporate Earnings Season: How Do Tech Giants’ Report Cards Shake the Market?
Earnings season is the period after each quarter when publicly traded companies report their financial results.
Key Metrics: Investors closely watch a company’s revenue, Earnings Per Share (EPS), profit margins, and, critically, its Forward Guidance—the management’s forecast for future performance.
Market Reaction: Market volatility typically spikes during earnings season. When a company’s results exceed analysts’ expectations (a “beat“) or fall short (a “miss“), its stock price often experiences sharp fluctuations.
The Influence of Giants: Because the Nasdaq-100 is market-cap weighted, the earnings results of its largest components (like the “Magnificent Seven”) have a disproportionately large impact on the entire index’s direction. An excellent or poor performance from a single giant can be enough to lift or drag down the entire index.
Geopolitics and Global Events: Potential Risks to the Tech Supply Chain
In today’s globalized world, a conflict in any region can ripple through global markets.
Sources of Uncertainty: Geopolitical events such as wars, trade disputes (like the U.S.-China tech war), international sanctions, and political instability inject immense uncertainty into the market.
Vulnerability of the Tech Sector: The technology industry is particularly vulnerable due to its highly globalized and complex supply chains. The production of many critical components, such as advanced semiconductor chips, is highly concentrated in politically sensitive regions like Taiwan. Any disruption to these supply chains can lead to production delays, component shortages, and soaring costs, directly hitting the revenues and profits of Nasdaq’s leading companies.
Investor Sentiment and Narratives: The Psychology of Tech Stock Bubbles
Beyond cold, hard data, the market is profoundly influenced by human emotions.
Narrative Economics: Proposed by Nobel laureate Robert Shiller, this theory posits that popular narratives (i.e., stories) that evoke strong emotional responses are a significant driving force behind economic fluctuations and market bubbles. Nasdaq has always been at the center of powerful narratives, from the “dot-com revolution” to the “AI era,” and these stories greatly influence investor behavior.
Investor Sentiment: The collective mood of market participants—optimism, pessimism, or fear—is a direct driver of market volatility. Positive sentiment can lead to asset overvaluation and bubble formation, while negative sentiment can trigger panic selling.
The Psychology of Bubbles: Speculative bubbles, like the dot-com bubble of the late 1990s, typically follow five stages: Displacement, Boom, Euphoria, Profit-Taking, and Panic. The psychological drivers behind them include Fear of Missing Out (FOMO), Overconfidence, and Herd Behavior. These irrational factors can cause asset prices to deviate severely from their intrinsic value.
What is Nasdaq’s Position Among the Three Major US Stock Indices?
To truly appreciate Nasdaq’s unique character, it must be viewed in a broader context. By comparing it with its older, more traditional peers—the S&P 500 and the Dow Jones Industrial Average—we can see not only differences in stock composition but also gain insight into the distinct philosophies behind their construction.
Components and Weighting: Tech Growth vs. Broad Market vs. Blue-Chip Stability
The most fundamental difference between the three major indices lies in their component selection and weighting methodology.
Nasdaq Composite Index: Of the three, it has the broadest coverage, including over 2,500 stocks. It uses market-cap weighting and its sector distribution is heavily skewed towards technology stocks.
S&P 500 Index: Comprised of 500 large-cap U.S. companies carefully selected by a committee. It also uses market-cap weighting, but it is designed to be a broad, diversified representation of the U.S. economy, covering about 80% of the total U.S. stock market capitalization.
Dow Jones Industrial Average (DJIA): This is an elite club of 30 large “blue-chip” U.S. companies. Its most crucial feature is its price-weighted calculation method. This means that companies with higher stock prices have a greater influence on the index, regardless of their total market capitalization, a very unique mechanism.
Sector Distribution: Why is Nasdaq’s Sector Concentration Higher?
Differences in sector composition further highlight the distinct positioning of the three indices.
Nasdaq-100 Index: Its sector concentration is by design. The combined weight of the Information Technology and Consumer Discretionary sectors typically accounts for the vast majority of the index. More importantly, it has no exposure to the financial sector. As of the first quarter of 2024, the weight of tech stocks alone was nearly 60%.
S&P 500 Index: Its sector distribution is much broader and more balanced. Although Information Technology is still the largest sector (usually 27-30%), other sectors like Financials, Health Care, Industrials, and Consumer Discretionary also hold significant weight, providing a more comprehensive economic snapshot.
Dow Jones Industrial Average: While its 30 companies come from various sectors, its limited number means its sector representation may not be as systematic and comprehensive as the S&P 500.
Long-Term Performance and Risk Assessment: The Trade-off Between Return and Volatility
Historically, the different index positionings have led to distinctly different risk-return profiles.
Historical Performance: Over the long term, especially in bull markets led by technological innovation, the Nasdaq index has typically generated higher returns. However, this high return comes with higher risk, and its declines during bear markets are often more severe. For example, after the dot-com bubble burst, the Nasdaq index once fell by over 80%.
Volatility: Nasdaq’s volatility has consistently been higher than that of the S&P 500 and the Dow Jones, a well-established market consensus.
Risk-Adjusted Return (Sharpe Ratio): Despite its higher volatility, the Nasdaq-100’s Sharpe Ratio has often been historically superior to that of the S&P 500. The Sharpe Ratio measures the excess return earned for each unit of risk taken. A higher Sharpe Ratio implies that the Nasdaq’s excess returns have largely compensated for the additional risk it undertakes, demonstrating superior risk-adjusted performance.
These three major indices actually embody three distinct investment philosophies, each representing a different economic narrative. Nasdaq represents an investment in disruptive growth and future innovation, a high-risk, high-potential-return choice suitable for those who firmly believe that technology will continue to reshape the world.
The S&P 500 represents an investment in the overall U.S. corporate economy. It is a quintessential core asset, offering a balanced allocation to both growth and value sectors, serving as the benchmark for American capitalism itself. Meanwhile, the Dow Jones represents an investment in mature, stable blue-chip stocks, a curated list of industrial and consumer giants. Its unique price-weighting method makes it more of a time-honored barometer reflecting market sentiment around America’s most iconic companies, rather than a precise economic measurement tool.
Advanced Trader Insights: What Nasdaq Trading Characteristics Should You Know?
For traders seeking to sharpen their trading acumen, the Nasdaq ecosystem offers some unique trading characteristics and specialized market indicators that can reveal deeper market dynamics. Understanding these advanced concepts—namely, extended trading hours and the volatility index—is crucial for navigating this fast-paced, information-driven market.
Pre-Market and After-Hours Trading: How to Utilize Extended Trading Sessions?
A notable feature of the U.S. stock market is its Extended-Hours Trading, which allows trading outside of the normal session (9:30 AM to 4:00 PM Eastern Time).
Definition and Times: The extended session primarily includes Pre-Market Trading, which can start as early as 4:00 AM ET, and After-Hours Trading, which can continue until 8:00 PM ET.
Trading Mechanism: Trades during these sessions are matched through Electronic Communication Networks (ECNs) rather than the regular mechanisms of the main exchanges.
Core Significance: Extended trading hours are particularly important for Nasdaq because a lot of market-moving news, such as quarterly corporate earnings reports, key economic data, and merger announcements, is often released outside of regular trading hours. This provides traders with the first opportunity to react to new information.
Risks and Rules: Traders must be aware that trading during these hours is characterized by significantly lower liquidity and higher volatility. This often leads to wider bid-ask spreads, and orders may face the risk of not being filled completely or at all. Therefore, most brokers only accept Limit Orders during extended hours to protect traders from unfavorable prices.
Measuring Market Fear: How to Interpret the Nasdaq Volatility Index (VXN)?
Besides price itself, the “mood” of the market can also be quantified. The Nasdaq Volatility Index (VXN) is one such key sentiment indicator.
Definition: VXN stands for the CBOE Nasdaq-100 Volatility Index. It is often referred to as the “tech fear index” and is the Nasdaq market’s equivalent of the famous VIX Index (which tracks the S&P 500).
Calculation Principle: The VXN does not measure historical volatility but rather the market’s expectation of 30-day forward implied volatility. This expected value is calculated using a complex mathematical model based on the real-time prices of Nasdaq-100 index call and put options.
How to Interpret It:
High VXN Readings: Indicate extreme fear among market investors, who expect sharp price swings in the future. From a contrarian perspective, extreme panic can often signal a market bottom, potentially heralding a buying opportunity.
Low VXN Readings: Reflect general optimism and complacency among investors, who expect the market to remain calm. Extreme complacency can sometimes be a warning sign of an impending market top.
VXN vs. VIX: Because the tech-heavy nature of the Nasdaq-100 makes it inherently more volatile than the more diversified S&P 500, VXN readings are typically higher than those of the VIX.
Conclusion: Mastering Nasdaq, Grasping the Pulse of Future Technology
Nasdaq is more than just a stock exchange; it is an ecosystem driven by the spirit of innovation. Navigating this market requires a multi-dimensional understanding, encompassing not only insight into macroeconomic policy trends and corporate fundamentals but also a deep appreciation for the powerful influence of market narratives and collective investor psychology.
Navigating the waves of the Nasdaq market requires the perfect combination of knowledge, tools, and cost-effectiveness. Cashback Island is not only committed to helping you substantially save on every transaction cost through trading rebates but also aims to be your strong support throughout your investment journey. The in-depth educational guides, professional calculators, and real-time market intelligence we provide are designed to empower you with a clearer vision, helping you walk more steadily and further on your path of exploring investments in technology and innovation.
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Frequently Asked Questions
Q1. What is the key difference between the Nasdaq-100 Index and the Composite Index?
The Nasdaq-100 Index selects the top 100 non-financial companies by market cap (like Apple, Microsoft), focusing on the dynamics of tech giants. The Composite Index includes all 2,500+ listed companies, including financial and small- to mid-cap firms.
Q2. How often are the constituents of the Nasdaq index adjusted?
The Nasdaq-100 undergoes an annual rebalancing on the third Friday of December. Companies that fall out of the top 125 by market cap are removed, and new eligible companies are added to bring the count back to 100. It is also reviewed quarterly to adjust weightings.
“Forex trading involves high risk and may result in the loss of funds. The content of this article is for informational purposes only and does not constitute any investment advice. Please make decisions carefully based on your personal financial situation. Cashback Island assumes no liability for any trading-derived responsibilities.”
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