The NASDAQ is an index of the 100 largest non-financial companies listed on the Nasdaq Stock Market. It focuses on the top performing industries such as technology (54%), consumer services (25%), and healthcare (21%).
This index the index tracks the performance of the world’s most innovative companies, including Apple, Google, Intel, and Tesla. The NASDAQ is a benchmark primarily for the US tech stocks.
Imagine a basket of companies, which issue shares. The NASDAQ index follows up changes in their share prices. It’s well-know for its day-to-day volatility. That’s why it’s so attractive for traders around the world.
How is it calculated?
The NASDAQ-100 index is a modified market capitalization-weighted index. The value of the index equals the aggregate value of the share weights, also known as the index shares, of each of the index securities multiplied by each such security's last sale price, and divided by the divisor of the index.
This weighting allows limiting the influence of the largest companies and balancing the index with all members. No company on the Nasdaq-100 can have more than a 24% weighting.
How to trade NASDAQ with FBS?
You can trade contracts for difference (CFDs) on the NASDAQ. CFDs reflect the NASDAQ movement. It allows you to trade in both directions. In other words, you can gain as from the price going down as well as from it going down.
Also, you can use leverage. This means that with only a small amount of money you can control much bigger financial positions. Always remember that leverage gives you an opportunity to multiply your account. On the downside, you may lose a considerable part of it if the market if the market goes against your trades.
What drives the NASDAQ price?
As mostly the technology sector index, the NASDAQ is driven by earnings reports, key appointments and new product launches. Moreover, the US economic factors such as interest rates, monetary policy and economic indicators in general can hugely influence the index as they impact company investment rates and consumer appetite for products.
2020-05-20 • Updated