Guide Note

The NASDAQ is an American stock exchange. It is the largest electronic screen-based equity securities trading market in the United States. It lists more companies and has more trades per day than any other U.S. market. The NASDAQ is owned and operated by the NASDAQ OMX Group and is monitored by the Securities and Exchange Commission.

Fast Facts

1. Founded February 8, 1971
2. Headquarters: New York City
3. Includes about 3,200 companies
4. Handles 2 of every 7 shares traded in America
5. CEO: Robert Greifeld

NASDAQ was founded in 1971 by the National Association of Securities Dealers as the world's first electronic stock market. At first, it was merely a computer bulletin board system and did not actually connect buyers and sellers.

Until 1987, most trading occurred via the telephone, but during the October 1987 Stock Market Crash, market makers often didn't answer their phones. To counteract this, the Small Order Execution System (SOES) was established, which provides an electronic method for dealers to enter their trades. NASDAQ now requires market makers to honor trades over SOES. The 1998 merger with the American Stock Exchange formed the NASDAQ-Amex Market Group. By the beginning of the 21st century it had become the largest electronic stock market in the United States.