NASDAQ Composite

What is the Nasdaq Composite?

The Nasdaq composite, founded in 1971, is a broad based market capitalization weighted index tracking more than 3,000 stocks.  While it has representation from all industries, the index is most predominately known for it's exposure to the technology and biotechnology sectors and therefore does not represent an accurate view of the entire marketplace.  It has many growth companies with lower market capitalizations and therefore trades with higher levels of volatility than the other benchmark indices such as the DJIA and the S&P 500.  The Nasdaq composite trades more volume than any other market index in the world. 

A majority of the stocks from the technology boom in the late 90's were part of the Nasdaq Composite; therefore, when the market subsequently crashed, the Nasdaq took the hardest hit, dropping nearly 80% from its peak.

What Kinds of Securities are Listed on the Nasdaq Stock Market?

Securities of the following types are listed on the Nasdaq:

• American Depositary Receipts (ADRs)
• Common Stock
• Limited Partnership Interests
• Ordinary Shares
• Real Estate Investment Trusts (REITs)
• Shares of Beneficial Interest (SBIs)
• Tracking Stocks

What is NOT listed on the Nasdaq:

• Closed End Funds
• Convertible Debentures
• Exchange Traded Funds (ETFs)
• Preferred Stocks
• Rights
• Warrants
• Units
• Derivative Securities

Additionally, to be listed on the Nasdaq, the company must be registered with the SEC and have lined up at least 3 market makers for their stock.  Also, they must have other minimums in terms of assets, outstanding shares, and capital.