Know All about Nasdaq 100 index

Introduction

Nasdaq100 is stock market Index in United States in Nasdaq stock Exhange. Unlike Name suggests, it consists of more than 100 stocks in fact 102 stocks. It was started launched January 31, 1985, by the Nasdaq Exchange. Its short name is NDX-100. Nasdaq touch closing all-time high of 16573 on November 19, 2021.Nasdaq 100 and Nasdaq composite index are two different Index. Nasdaq composite index is an Index consists of More than 3000 companies Listed on Nasdaq Stock exchanges.

The NASDAQ (National Association of Securities Dealers Automated Quotations) is a global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. It was founded in 1971 and is the second-largest stock exchange in the world by market capitalization, after the New York Stock Exchange (NYSE).

One of the key features of the NASDAQ is that it is fully electronic, which means that all trading is done through computers rather than on a physical trading floor. This allows for faster and more efficient trading, as well as greater transparency and lower costs for both buyers and sellers.

The NASDAQ is home to many of the world’s leading technology companies, such as Apple, Microsoft, and Amazon, as well as a wide range of other industries. It is known for its high volatility and fast-paced nature, which can make it an attractive market for active traders and investors.

In addition to its role as a stock exchange, the NASDAQ also operates a range of market services, such as providing trading and market data systems, as well as listings and corporate services for companies.

Overall, the NASDAQ plays a vital role in the global financial system and is an important barometer of the health of the technology sector and the economy as a whole.

Five Year/One Year Return on Nasdaq-100

Nasdaq 100 has given 75% absolute return in past five years. Though in last one year (14.10.2022), Nasdaq has given 30% negative return due to rout in Tech/growth companies.

Five Year chart of Nasdaq100

Time Taken by Nasdaq-100 to complete 1000 point

The chart given below shows the Time taken in number of days to complete each 1000 point. Nasdaq100 take almost 7 years (4255 days) to achieve level from 4000 to 5000 Longest period. This was due to dot com bubble burst in year 2000. However, Nasdaq completed its journey from 11000 to 12000 in just 20 days.

Rebalancing of Nasdaq 100

The index is rebalanced quarterly only if:

• One company is worth 24% of the index
• Companies with a weighting of at least 4.5% make up 48% or more of the index

The index is rebalanced annually, after the quarterly rebalancing, only if:

• One company is worth 15% of the index
• The five largest companies by market capitalizations have weights of 40% or more of the index

Year wise return Nasdaq 100 last 10 years

Year-wise return of last 100 year for Nasdaq 100 is given in the table below. In last 10 year, In year 2020, Nasdaq 100 has given highest return in last year of 47.58 % after recovering from Covid-19 lows. But from the beginning of current year 2022 Nasdaq is giving negative return of 35%.

Holiday and timing in Nasdaq Stock Exchange

Also Read about Dow Jones Index