The Nasdaq, also known as the National Association of Securities Dealers Automated Quotations, stands as the largest and pioneering digital stock exchange globally. Unlike traditional trading floors, all transactions within Nasdaq occur electronically, marking a significant shift in the way securities are traded.
It is the world’s 2nd biggest securities platform by market cap of its registered companies, trailing only the New York Stock Exchange (NYSE).
Nasdaq in a nutshell
- Nasdaq is the largest digital stock exchange globally, operating electronically since its establishment in 1971.
- It holds the second-largest market cap globally, after the New York Stock Exchange.
- It lists 3,889 companies across various sectors, including technology, retail, and medical services.
- The exchange operates 29 markets across the US, Canada, Scandinavia, and the Baltic States for trading.
Understanding Nasdaq
When it first opened its doors in 1971, the Nasdaq was a leader in electronic services, providing listed services for organizations that had formerly been exchanged over-the-counter (OTC). It immediately attracted numerous fresh creative, high-tech firms, like Google and Apple.
The Nasdaq now performs a vital role in the USA and worldwide economies, with its 2 main benchmarks — the Nasdaq Composites and the Nasdaq 100 — serving as corporate benchmarks.
To assist you in making sense of everything, here’s everything you ought to learn about the Nasdaq, from what it is to effective trading tactics.
Tasks of the Nasdaq
The Nasdaq is a supplier exchange in which both purchasers and sellers trade with market makers for a specific asset or securities, as opposed to an auction system (such as the NYSE) in which purchasers and sellers interact with each other via a brokerage.
The 3,889 Nasdaq-listed businesses comprise ten main areas or business groupings. The majority work in tech, retail services, and medical services.
Whilst Nasdaq contains several large firms, like Microsoft, Facebook, and Amazon, its equities are more development-oriented and have fewer blue-chip than that on the NYSE. Nasdaq shares are known for their creativity, turbulence, and fluctuation.
The Nasdaq, based in NYC, runs 29 marketplaces in the United States, Canada, Scandinavia, and the Baltic States for the dealing of equities, futures, corporate bonds, and commodity markets. In addition, the firm operates a clearing hub and 5 central stock storage facilities in the USA and Europe. 100+ organizations in 50+ nations utilize its trading system. Nasdaq INC is traded on the Nasdaq via the code NDAQ and has been a component of the S&P 500 Stock index since 2008.
History of Nasdaq
The Nasdaq was established in 1971 by the National Association of Securities Dealers, which is presently abbreviated as FINRA. It originated as a quote system — a computerized ticker showing buy and sell prices — but soon expanded to include trading and transaction services.
Nasdaq became a completely autonomous, publically traded firm in 2002. It was recognized as an SEC-registered stock exchange market in 2006.
In 2006, Nasdaq formally withdrew from the NASD and started operations as a national securities market. It merged with the Scandinavian exchanges business OMX in 2008 to form the Nasdaq OMX Company. In 2015, the corporation was renamed Nasdaq Inc. (NDAQ).
The Nasdaq has not had and will never possess an actual trading floor. When large corporations like Apple attempted to exit the market in 1995, this created a concern. Without a trading desk, there was no strong presence, no opening bells ceremonial, and, more significantly, no location from which news stations could stream across the trading day.
That difficulty was rectified in 2000 with the building of MarketSite, a large 10-storeyed tall skyscraper in New York City at the junction of 43rd and Broadway, equipped with TV displays, a complete TV studio, and, also, an opening bell ritual. However, the actual trade is still made electronically.
How to Trade the Nasdaq 100 with Binary Options?
Trading the Nasdaq 100 with Binary Options involves speculating on the index’s movement without directly owning it. Traders simply predict whether they believe the Nasdaq 100 will rise or fall within a specified time frame. Here’s a step-by-step guide to get you started trading indices like the Nasdaq 100 with Binary Options:
1. Find a Reliable Broker
Look for a well-established brokerage firm that offers Binary Options trading specifically for the Nasdaq 100 index, along with other financial instruments. Below are three top-rated brokers known for their reliability, security, and global presence. They provide access to Nasdaq 100 Binary Options trading and offer free demo accounts for practice.
- Welcomes international clients
- Offers high payouts: 90% – 97%+
- Professional-grade trading platform
- Swift deposit process
- Enables Social Trading
- Provides free bonus incentives
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95%
- Fast withdrawals
- Signals
- $10 minimum deposit
- Free demo account
- High return up to 100% (in case of a correct prediction)
- The platform is easy to use
- 24/7 support
- Welcomes international clients
- Offers high payouts: 90% – 97%+
- Professional-grade trading platform
- Swift deposit process
- Enables Social Trading
- Provides free bonus incentives
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95%
- Fast withdrawals
- Signals
- $10 minimum deposit
- Free demo account
- High return up to 100% (in case of a correct prediction)
- The platform is easy to use
- 24/7 support
2. Open Your Account
Proceed to register for a trading account. This involves providing necessary personal details, setting up a secure login, and completing identity verification procedures as per regulatory standards. Some brokers may offer alternative registration methods like social media sign-ups. In this example, we’ll use Pocket Option as our broker.
3. Fund Your Account
Consider utilizing the broker’s demo account to gain familiarity with Nasdaq 100 Binary Options trading without risking real money. Once comfortable, deposit funds into your trading account using secure payment methods supported by the broker.
4. Select Nasdaq 100
Choose the Nasdaq 100 index as your underlying asset based on your trading strategy, market analysis, and risk tolerance. You can find the Nasdaq 100 index under the name US100 on Pocket Option.
5. Develop Your Strategy
Analyze market trends, news, and economic indicators to forecast whether the Nasdaq 100 index will rise (Call option) or fall (Put option) within a predetermined time frame. Use technical analysis tools such as Bollinger bands, support and resistance levels or the RSI to improve your trading decisions.
6. Choose Expiry Time
Binary Options come with predefined expiry times, ranging from minutes to hours. Before choosing a suitable time frame for your Nasdaq 100 Binary Options trade, consider your trading objectives and market conditions. In this example, we’ll choose a 5-minute expiry time.
7. Set Investment Amount
Define the amount you are willing to invest in the Nasdaq 100 Binary Options trade. Our investment amount is $1000, and the payout for Nasdaq 100 on Pocket Option is 51%.
8. Execute the Trade
Initiate the Binary Options trade by selecting either a Call or Put option. Some brokers may require additional verification steps before executing the trade. Keep a close eye on the trade until expiry and consider using early close options if offered by the broker. If the prediction is successful, you will receive a predetermined payout percentage.
In this scenario, we’ll set a Higher Option, anticipating a rise, and make a profit of $510 (51% of $1000) based on Pocket Option’s payout rate.
