NASDAQ-AMEX

The National Association of Securities Dealers Automated Quotations(NASDAQ) was set up in 1971 as an international screen-based trading systemwithout a central dealing fioor.

In 1988 the market was the first overseas securities market to be granted full legal status as a recognised investment exchange by the UK Department of Trade & Industry. NASDAQ developed rapidly to become the second largest equity market in the USA and the fifth largest in the world.

In 1998 it merged with the of the American Stock Exchange (AMEX). This market had been formally set up in 1921 by brokers who worked outside the NYSE.

In 1980, AMEX became the first market to trade put options on all the securities underlying its call options. In 1984, the AMEX became the firstmarket to introduce touch-screen technology to a trading fioor.

The following year the exchange established another first with the two-way electronic hook-up with the Toronto Stock Exchange, the first link-up between primary equity markets in different countries.

NASDAQ-AMEX now lists thousands of US and foreign companies - more companies than any other stock market in the world, it's claimed.

It is increasingly looking to challenge its main competitor in the US, theNew York Stock Exchange (known as the 'Big Board') while, at the same time, staving off competition from private ECNs .

The market's Small Order Execution System provides small investors with quick access to the market. Using SOES they can now make their own bids and offers, this of course adds liquidity.

Like the NYSE, NASDAQ-AMEX is reviewing the idea of longer opening hours. Much of the trading carried out by individuals in the USA now takes place before or after regular market hours on ECNs.

NASDAQ-AMEX is also promoting itself strongly overseas. For example, several UK hi-tech companies have listed on this market rather than on thedomestic stock market. The reasons are greater liquidity (i.e morepotential investors) and greater understanding of high technology sharewithin the market place. Professional advice is needed.

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Last Updated: February 2008 © Moneyextra.com

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