NASDAQ

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NASDAQ

  1. 1. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. National Association of Securities Dealers Automated Quotation Presented by: SIDDHARTH GALA
  2. 2. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. A Market that Works for Investors NASDAQ provides an open, transparent and competitive platform to enable buyers and sellers to efficiently interact and access pools of liquidity.
  3. 3. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. I. Introduction • Computerized system established  by  the NASD to  facilitate trading by  providing broker/dealers with current  bid and ask  price quotes on over-the-counter stocks  and  some listed stocks. • NASDAQ  does  not  have  a  physical trading  floor  that  brings together buyers and sellers. • All  trading  on  the  NASDAQ  exchange is  done  over  a network of computers and telephones.  3
  4. 4. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. I. Introduction • Currently it has a greater trading volume than any other  U.S.  exchange,  making  approximately  1.8  billion  trades  per day.  • The  NYSE  is  still  considered  the  biggest  exchange  because its market capitalization far exceeds that of the  NASDAQ.  • Well  known  for  being  a  high-tech  exchange,  trading  many new, high growth, and volatile stocks.  • NASDAQ is a publicly owned company, trading its shares  on its own exchange under the ticker symbol NDAQ. 4
  5. 5. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. I. Introduction • The  exchange  is  a  dealers' market,  meaning  brokers  buy and sell stocks through a market maker rather than  from each other.  • A market maker deals in a particular stock and holds a  certain number of stocks on his own books so that when  a  broker  wants  to  purchase  shares,  he  can  purchase  them directly from the market maker. • NASDAQ  National  Market  and  the  NASDAQ  Small-Cap  Market  developed  from  1982  to  1986,  as  the  larger  companies separated themselves from the smaller ones 5
  6. 6. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. I. Introduction • The stock exchange built the NASDAQ MarketSite in New  York's Times Square to create a physical presence.  • The tower has a large outdoor electronic display, giving  current financial information 24 hours a day.  6
  7. 7. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. History • Developed in 1971 • First electronic stock exchange in the world. • Created as a means to increase the trading of Over-the- Counter stocks, those that were unable to meet listing requirements for larger exchanges. • 2,500 OTC stocks were traded on the NASDAQ's first trading day, February 8, 1971. 7
  8. 8. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. History • 1990's - NASDAQ began to be seen as a competitor of the NYSE • 1994 - NASDAQ beat the NYSE in annual shares traded • 1998 - NASDAQ merged with the American Stock Exchange, which mostly traded options and derivatives, creating the NASDAQ-AMEX Market Group. • The combined company still operates as two separate exchanges, but is better able to compete with the NYSE. 8
  9. 9. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. NASDAQ: Three Levels • Level 1: is for the customers who do not consistently trade which made them not a market maker and who usually want the current quotes on stocks. • Level 2: is for the customers who consistently trade stocks which make the brokers to choose the market maker with the best bid and/or ask and make the deal. • Level 3: is for the market makers who wants the level 2 but also needs the capability to change their own quotations 9
  10. 10. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. Facts that make NASDAQ the stock market of choice for companies and investors. 1. NASDAQ is the stock exchange for industry leaders, recognized around the globe as one of the largest U.S. stock markets. 2. NASDAQ has significant reach in a broad range of industry sectors – financial, industrial, healthcare and consumer companies comprise over 50% of NASDAQ listings. 1. NASDAQ has the world's highest listing standards. 2. NASDAQ is a global platform for capital formation. 3. NASDAQ is #1 on the NYSE. 10
  11. 11. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. Facts that make NASDAQ the stock market of choice for companies and investors. 6. NASDAQ offers an exceptional product with lower listing fees. 7. NASDAQ provides comprehensive, unbiased trading analysis. 11
  12. 12. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. Why choose NASDAQ over the others? • NASDAQ volatility is slightly lower than the NYSE, according to a May 2005 independent study by the U.S. GAO. • NASDAQ maintains greater stability in times of market stress. –When markets are unstable specialist firms reduce their risk by widening spreads, participating less, or halting the stock altogether. NASDAQ's spreads remain tight and as a result volume shifts to NASDAQ and other electronic markets. • A NASDAQ stock with a $1B market cap, trading 1M shares per day saves $1.5 million in trading costs per year in comparison to a similar stock on the NYSE. 12
  13. 13. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. 13 Market Structure  Superior Trading Characteristics  Open, Competitive Market Delivering Best Executions for Investors Greater Visibility  More Analyst Coverage (Multiple Market Maker System) Better Services and Support  Insight and Analysis Tools for Trading, Ownership and Peer Comparisons Superior Value for Listing $  Listing Fees are less on NASDAQ vs. NYSE Why do Companies list on NASDAQ?
  14. 14. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. 14 Consumer Discretionary 13% Energy 2% Financials 22% Health Care 17% Industrials 10% Information Technology 28% Materials 2% Utilities 1% Telecommunication Services 2% Consumer Staples 3% NASDAQ – National Industry Leaders *Includes Companies included in NASDAQ’s Dual Listing Program
  15. 15. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. 15 NASDAQ National Market Listing Requirements 1 For Initial listing under Standard 3, a company must satisfy one of the following: the market value of listed securities requirement or the total assets and the total revenue requirement. Under Marketplace Rule 4200(a)(19), listed securities is defined as “securities quoted on NASDAQ or listed on a national securities exchange. 2 Seasoned companies (those companies already listed or quoted on another marketplace) qualifying only under market value of listed securities requirement of Standard 3 must meet the market value of listed securities and the bid price requirement for 90 consecutive trading days prior to applying for listing. 3 Publicly held shares is defined as total shares outstanding less any shares held by officers, directors or beneficial owners of 10% or more. 4 Round lot holders are considered holders of 100 shares or more. 5 An Electronic Communications Network (“ECN”) is not considered a market maker for the purposes of these rules. 6 Marketplace Rules 4350 and 4351. NASDAQ National Market Listing Requirements
  16. 16. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. NASD National Association of Securities Dealers
  17. 17. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. History • Watches over the NASDAQ to make sure the market operates correctly. • Self-Regulatory Organization of the securities industry responsible for the operation and regulation of the NASDAQ stock market and over-the-counter markets. • In 2007, the NASD merged with the New York Stock Exchange's regulation committee to form the Financial Industry Regulatory Authority, or FINRA. 17
  18. 18. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. The Rules of Fair Practice • NASD’s most important rules are those designed to maintain high standards of conduct. • Depending on the offense, a member found guilty of infractions of these rules may receive a penalty as mild as censure, or may receive a fine, a suspension, or even expulsion from the Association. • Expulsion is the ultimate penalty because an expelled member would find it virtually impossible to carry on a profitable business outside the NASD. 18
  19. 19. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
  20. 20. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. Overview • NASDAQ OMX Group, Inc. is the world's largest exchange company. • Delivers trading, exchange technology and public company services across six continents, with approximately 3,700 listed companies. • Offers multiple capital raising solutions to companies around the globe. • NASDAQ OMX technology supports the operations of over 70 exchanges, clearing organizations and central securities depositories in more than 50 countries 20
  21. 21. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. Overview •The world's largest IT industry exchange, with a total market value over $2 trillion. •The world's largest biotech industry exchange, with total market value at almost $270 billion. •The world's largest paper product industry (part of the materials sector) exchange at a market value over $32 billion. •NASDAQ OMX is number one geographically in major-worldwide listings, with approximately 3,700 companies in 50 countries representing $4.1 trillion in total market value. 21
  22. 22. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. NASDAQ OMX Business Areas • Global Data Products • Global Index Group • Listings-Corporate Client Group • Transaction Services Nordics • Transaction Services U.S. • Corporate Services • Market Technology • NASDAQ OMX Europe 22
  23. 23. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. END

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