What is an index
This economic indicator combines several shares of companies that are traded on the Nasdaq Stock Market.
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The exchange rate is calculated using a special formula and reduced to a certain number, which is displayed as a figure. More than 40 thousand indicators are taken into account for the formation, and the indices themselves create a whole family.
Which companies are included in the index?
The shares of many well-known companies are traded on the NASDAQ exchange. All of these corporations are high-tech and represent the most advanced segments of their industries.
In particular, we can highlight:
But it's not just computer and communications giants that are entering the realm of tech exchanges. Shares of banks, raw materials and pharmaceutical corporations are listed here. One common feature for all is leadership in their field of activity.
The composition includes indicators not only of American companies, but also of companies from other countries of the world.
Index history
The original single ratio was created in 1971 and is now called the Nasdaq Composite. But since then, high technology has experienced explosive growth, the number of industries has increased, companies have grown like mushrooms after rain, which has created the need to diversify indicators and calculate more specialized options.
Types of index
Currently, the following NASDAQ indices are distinguished:
- Nasdaq Composite (COMP), founded in 1971;
- Nasdaq-100 (NDX), counted since 1985;
- Nasdaq-100 Equal Weighted Index (NDXE), since 2005;
- Nasdaq-100 Technology Sector Index (NDXT), since 2006;
- Nasdaq-100 Biotechnology Index (NBI), since 1993;
- OMX Stockholm 30 Index (OMXS30), since 2006;
- PHLX Semiconductor (SOX), since 1993;
- Nasdaq Global Equity Index (NQGI), since 2001.
Two main types of NASDAQ index
- The NASDAQ-100 index is an indicator that includes 100 of the most famous successful corporations specializing in high technology. This indicator reflects the position of assets of manufacturers and research firms only, not including banking institutions and financial groups operating in this segment;
- NASDAQ Composite index - a more general exchange parameter, which is calculated based on the value of securities of more than 5,000 companies operating in different segments of the scientific and technical market;
- NASDAQ Bank - an indicator that is calculated based on the stock price of the largest banks and savings and loan companies;
- NASDAQ Financial is a parameter that works with securities of leading financial groups related to advanced technologies
NASDAQ 100
This index is created by economic indicators and stock prices of the 100 largest companies in the field of IT technologies, communications, biotechnologies, and trade. This does not include financial companies and banks.
To be precise, the Nasdaq Composite list includes 106 companies, along with Microsoft, Intel and Apple, shares of Starbucks (coffee shops), Kraft Heinz (yes, the ones with ketchup and mayonnaise), Tesla are included. In addition to American ones, there are foreign corporations, for example, British Vodafone or Chinese Baidu.
NASDAQ-100 stock index chart today
NASDAQ price for today. NASDAQ stock index quotes online. Streaming graph in real time. NASDAQ stock index futures chart online. The time on the chart is Moscow GMT+3. Daily schedule. One division (one candle) is one day. The timeframe (time interval of quotes on the chart) can be changed independently, in the upper left part of the chart. From 1 minute to 1 month. There is no need to update the NASDAQ index chart online; prices are received in real time.
(wait a few seconds after the page loads - the graph will appear)
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you have to do is save the page to your favorites so that you can return to it and, if necessary, find out the current prices for the NASDAQ index. To save a page as a favorite, press the keyboard shortcut Ctrl+D. Press the Ctrl key and, without releasing it, press the D key.
About the NASDAQ indices
Online stock indices allow you to be aware of the current market situation throughout the stock market as a whole. For example, the NASDAQ-100 index includes, in a certain proportion, shares of the 100 largest companies traded on the NASDAQ exchange. The 100 companies include hardware and software companies, telecommunications companies, wholesalers and retailers, and biotechnology and pharmaceutical companies. The NASDAQ-100 does not include financial companies. On the Nasdaq exchange itself, shares of more than 3,000 high-tech companies are traded. In addition to the world-famous NASDAQ-100 (this is what they talk about in economic news blocks, along with other stock indices), the NASDAQ Composite and a number of industry stock indices are also calculated.
- The NASDAQ Composite is an index of all stocks traded on the NASDAQ exchange.
- NASDAQ Composite Bank Index - index of shares of companies in the banking sector
- NASDAQ Composite Biotechnology Index - index of shares of medical and pharmaceutical companies
- NASDAQ Composite Computer Index - for companies developing computer software and hardware
- NASDAQ Composite Financial Index - for companies in the financial sector, excluding banks and insurance companies
- NASDAQ Composite Industrial Index - index of shares of industrial companies
- NASDAQ Composite Insurance Index - index of shares of insurance companies
- NASDAQ Composite Telecommunications Index - for telecommunications companies.
Other stock indices
In addition to the NASDAQ-100, the main US stock indices also include the Dow Jones Industrial Average (DJIA) and the S&P 500 (Standard & Poor's 500 Index).
Is it possible to make money by trading the NASDAQ index?
The NASDAQ stock index is a very volatile trading instrument, ideal for intraday trading. If the stock market is falling, as it is now, you can safely enter sales on pullbacks and make a good profit. In a growing market, on the contrary, short-term declines are quickly replaced by uncontrollable long-term growth. Monitor not only the state of the US financial market, but also the stage of the entire market. If a stock market bubble begins to grow, money will definitely flow into speculation in shares of high-tech companies. The Nasdaq index is almost impossible to technical analysis - if it grows, it simply grows, breaking through all resistance levels on its way, without looking back or rolling back. If it falls, it falls like a stone. This is an exchange, here, unlike Forex, fear, greed, and panic are still present.
All-time price and dynamics of the NASDAQ Composite
The first two decades of calculating the coefficient were characterized by a smooth increase, without any special jerks or drops. Until, at the very beginning of the 90s, computer and telecommunications technologies took off. The development of the Internet and the dot-com boom (.com is pronounced dot com in English) led to the beginning of 2000 when the stock market reached its peak. But as happens with markets, after rapid growth there was a long-term decline, many companies went bankrupt, and the market deflated.
Since the end of the crisis of 2008-2009 and to the present day, the NASDAQ index has been growing at a rapid pace. True, at the end of 2022 the market sank significantly, but in 2022 it almost regained its position. The decline was associated with the crisis around Facebook, Amazon's poor financial performance, and Apple's decline in sales, which came as a surprise and caused a negative reaction from investors.
The NASDAQ chart basically follows the movement of other American indices, except for the surge of the 90s.
Types of NASDAQ indices and their historical analysis of NASDAQ dynamics
NASDAQ Composite
Throughout the history of NASDAQ, the index chart has practically followed the trend of the S&P 500 and Dow Jones, with the exception of one moment - the 2000s. Below is a chart of NASDAQ throughout its history:
Over the first 30 years of the index’s existence, a clear upward trend is visible and at the end of the 90s there is a sharp upward surge. By the way, such a sharp rise alone should have puzzled investors. However, the massive development of Internet technologies was encouraging. Bottom line: most Internet startups turned out to be unprofitable, which led to the “dot-com crash” - the bankruptcy of technology companies and the collapse of the index. Because the S&P 500 and Dow Jones are more diversified, they suffered less and recovered within a few years. NASDAQ Composite regained its position only in 2016.
The difficulty in objectively assessing the NASDAQ Composite Index has led to the need to create narrower indices that would reflect venture-backed high-tech startups in specific industries. For example:
- NASDAQ Bank Index - includes companies in the banking sector;
- NASDAQ Industrial - includes companies in the industrial sector;
- NASDAQ Computer - includes companies involved in software development;
- NASDAQ 100 - includes the 100 largest companies in the non-financial sector, whose securities are traded on the exchange of the same name;
- NASDAQ Biotechnology - includes companies in the pharmaceutical and biotechnology sectors.
There are more than 10 of them in total, but the last two are the main reference points.
NASDAQ 100
The index was introduced on January 31, 1985. It is based on companies that do not depend on the financial situation. The choice in favor of intellectual property was not made by chance: firstly, the world was just recovering from the fuel crisis of the 1970s, and secondly, three years earlier, a similar NYSE ARCA Tech 100 index was launched by a competitor.
At first, the index did not show much growth - Hi-Tech companies were not particularly keen on public offerings of shares, since at that time these technologies seemed something incomprehensible and dubious from the point of view of profitability. It was only with the boom of Internet technology in the early 1990s that the index overtook the NASDAQ Composite in popularity. The index chart for its entire history is presented below.
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Historical data actually follows the movement of the NASDAQ Composite.
NASDAQ Biotechnology
The index differs in that it is mainly influenced not by fundamental market factors (the “dot-com crash”, elections or referendum), but by real results in the field of pharmacological and biotechnological developments. Breakthroughs in research contribute to the growth of the index, unsuccessful research - to its fall. Financial support for the sector by the country’s leadership (investments from the budget) also plays a significant role.
So far, the index is showing volatile dynamics. The fall in the index was largely a consequence of market overheating. (700% over 6 years), but analysts cite the reason for the emergence of competitors to companies such as Biogen, Amgen, Celgene, which at that moment were falling in value.
And now that we have figured out what it is - the NASDAQ Index - let's move on to investment prospects.
Pros and cons of the index
You need to start with the cons, since there are few of them. More precisely, one: the market is specialized, designed for fast-growing companies, so even a slowdown in growth rates, not to mention stagnation or decline, causes a nervous reaction from investors, as was the case at the end of 2018.
But when stability returns, it is the companies included in the NASDAQ that attract the main investments, and the ratio returns to growth. Therefore, the return on an index investment is greater than a comparable investment in the Dow Jones or S&P.
The international nature of the NASDAQ indicator allows you to stay afloat even in difficult crisis conditions.
NASDAQ Index: history of appearance and principle of index calculation
The NASDAQ index was formed in 1971, but over time many branches have appeared from it. Therefore, answering the question of what the NASDAQ Index is, it is a whole family of indices that reflects the situation in the US high-tech market. The main (composite) index, with which the calculation began in 1971, is called the NASDAQ Composite. This is what they mean when they talk about the Nasdaq index.
The main difference between the NASDAQ Index and the S&P 500 is that it includes companies from all over the world, the number of which is more than 5,000 with a total capitalization of more than 6 trillion. dollars USA. By the way, the number of companies exceeds the same number of corporations on the NYSE and AMEX exchanges combined.
The calculation of the index is based on the principle of a simple moving average - the weighted average price of shares at the end of trading. In other words, NASDAQ Composite = the sum of the products of shares multiplied by their price and divided by the number of companies in the index.
Since the NASDAQ list of companies also includes fast-growing startups (and not all of them turn out to be equally profitable), it is revised an order of magnitude more often than the S&P 500 basket.
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How and where to make money on the index
Currently, to invest in the Nasdaq index, it is not necessary to work on the stock exchange while located directly in the United States. Major brokers, including Russian ones, provide opportunities to invest funds or enter into speculative transactions through their trading terminals from anywhere in the world.
To do this, you just need to enter into an agreement with a broker about the opportunity to invest funds on American platforms and have a certain amount in your account. Moreover, the amount on deposit depends not on the conditions of the broker, but on the American exchange, since all prices are in US dollars and even to purchase one share sometimes several hundred units of American currency are required.
You can trade the NASDAQ index through a Russian broker while in Russia.
Because It is impossible to simply buy or sell an index (this is a virtual number); you can only invest in it through an index fund that copies the dynamics.
Warning
Forex and binary options have nothing to do with stock indicators and NASDAQ. As, indeed, with the securities market, pricing and other transparent and understandable procedures. These pseudo-market inventions were invented only for the honest taking of money from gullible citizens. Prices there are created by tricksters to redirect money from the “investor’s” account into their pocket.
So, citizens, do not buy or fall for this kind of appeal. Invest in indices, stocks and bonds of well-known companies through reliable brokers who do not offer binary options.
Best brokers
The NASDAQ exchange employs only reliable and proven brokers. But even among the good ones, the best can be distinguished.
Verified foreign brokers
Name | Rating | pros | Minuses |
Interactive Brokers | 8/10 | They speak Russian | Subscription fee 10$\month |
CapTrader | 8/10 | No monthly fee | They only speak English |
Lightspeed | 7/10 | Low minimum deposit | Imposing services |
TD Ameritrade | 6.5/10 | Low commissions | Not everyone gets an account |
Prospects for investing in NASDAQ indices
It is difficult to say anything regarding the prospects of investing in any of the subtypes of the NASDAQ index family. Clearly, these investments cannot be classified as conservative strategies - the narrower the diversification of companies, the greater the industry risks the index itself is exposed to. After the 2000s, investors became more cautious with venture-backed startups, and so far the NASDAQ Composite and NASDAQ 100 behave almost the same as other indices - they sag before fundamental events (the referendum in the UK and the elections in the US).
Growth investing in the NASDAQ Composite Index and NASDAQ 100 Index can yield returns over the long term. However, a sharp jump upward could be a sign of another “bubble”.
The situation with NASDAQ Biotechnology is more interesting. There are examples in US history when individual biotechnology companies did not meet the expectations of investors as a result of development failures. This sector, although a priority after Trump’s victory, has great risks. NASDAQ Biotechnology's outlook is very mixed.
It is better not to use investments in the NASDAQ Biotechnology index as a main strategy and risk only a small part of the deposit.
And a few words about how a private trader can invest in the NASDAQ index. Almost every domestic Forex broker, starting from Alpari, etc. offers to speculate on all popular US indices. All you need to do is top up your account by 10-100 dollars. USA and select the desired instrument in MT4. Taking into account the spread, commissions and risks, this method is only suitable for speculation.
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The minimum threshold for a private investor on the international stock market usually starts from 5-10k US dollars. Only a few domestic companies provide clients with access to US exchanges (BCS, Finam, Otkritie). Also, through brokers working on the Moscow Exchange, you can buy the FXIT ETF, which almost completely copies the index.
The second option is investing through a US broker. Currently, the best option is Interactive Brokers, which has a representative office in the Russian Federation and a Russian-language version of the website. It is also worth considering taxation issues when working with securities; currently there is a “Double Taxation Agreement” between Russia and the United States.
Interesting facts about the index
Between the first peak of the NASDAQ index and the second, almost 17 years of development passed, entire new industries appeared, many technologies went from elite to mass, however, the coefficient took a long time to recover. The 2008 crisis had its say here too.
NASDAQ is expanding into Europe. The first attempt to buy the London LSE was blocked, but the acquisition of the Swedish OMX made it possible to seize a bridgehead in the Old World.
What affects the price
The price depends on the general world market conditions and the state of the American market in particular. However, the NASDAQ is based on companies registered in the United States. The coefficient reacts to the dollar exchange rate, political events, statements of significant persons, and fundamental indicators of the economy.
Analyst forecast and prospects
Corrections and downturns are inevitable both over the years and over shorter periods - days or weeks.
But in general, the growth of the NASDAQ index is undeniable, just as there is no doubt about the progress of technology and the development of human civilization. After all, it is precisely advanced achievements and their penetration into everyday life that largely reflect the performance of the NASDAQ indices.
Similar indexes
NASDAQ in its fluctuations correlates well with other American ratios:
- Dow Jones;
- S&P
The explanation here is simple: these numbers consist of a large number of indicators of American companies. The fall or rise of several shares cannot have a strong impact on the movement of the index itself; this requires global changes. That is why these indicators are so important in assessing the overall economic situation in the United States and the world.