NASDAQ 100

TradingKey19 hours ago

The Nasdaq-100 Index (NDX®), commonly known as the “Nasdaq” or “Nasdaq 100 Index,” is a stock market index that features the 100 largest non-financial companies listed on the NASDAQ stock exchange. This index serves as a widely recognized benchmark for the technology sector and includes major industry players such as Apple, Amazon, Microsoft, and Alphabet (the parent company of Google).

Background
Established on February 1, 1985, the NASDAQ 100 was designed to monitor the performance of the largest and most actively traded non-financial stocks on the NASDAQ stock exchange. Over time, the index has transformed into a representation of the technology and innovation sectors, emphasizing companies in fields like software, biotechnology, and internet services.

Calculation Method
The NASDAQ 100 is a market capitalization-weighted index, which means its value is influenced by the market value of the outstanding shares of its constituent companies. Companies with a higher market capitalization have a more substantial effect on the index’s performance. The index is calculated continuously throughout the trading day and is updated every second.

Importance of the NASDAQ 100
The NASDAQ 100 holds significance for several reasons:

Market Benchmark: As a benchmark for the technology sector, the NASDAQ 100 enables investors to assess the overall performance of the leading companies in the industry.
Economic Indicator: The index serves as a reflection of the health of the technology and innovation sectors, which are vital contributors to economic growth in today’s world.
Investment Performance: Numerous investment funds and portfolios utilize the NASDAQ 100 as a benchmark to evaluate their performance, with the goal of surpassing the index over time.
Passive Investing: The popularity of the NASDAQ 100 has led to the development of index-tracking investment products, such as exchange-traded funds (ETFs) and index funds, which provide investors with exposure to the index’s performance without the need to buy individual stocks.

For investors, the NASDAQ 100 presents an opportunity to invest in the leading technology and innovation companies through a single investment product. By investing in an index-tracking product that mirrors the NASDAQ 100, investors can achieve broad exposure to these sectors while minimizing the risks associated with selecting individual stocks. The real-time pricing and liquidity of the NASDAQ 100 also make it an appealing choice for both long-term investors and short-term traders.

Disclaimer: The content of this article solely represents the author's personal opinions and does not reflect the official stance of Tradingkey. It should not be considered as investment advice. The article is intended for reference purposes only, and readers should not base any investment decisions solely on its content. Tradingkey bears no responsibility for any trading outcomes resulting from reliance on this article. Furthermore, Tradingkey cannot guarantee the accuracy of the article's content. Before making any investment decisions, it is advisable to consult an independent financial advisor to fully understand the associated risks.

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