The Nasdaq 100 is an index of the top 100 non-financial stocks traded on the NASDAQ stock market. This index frequently includes companies in the technology or biotechnology sectors. The Nasdaq 100 index is a great tool for investors who want to trade technology companies since it gives a solid picture of how all tech sector firms are performing at any one moment.
In this post, we’ll take a closer look at the world’s most widely followed stock index: the NASDAQ 100. There are several methods you may start index trading today to acquire exposure to it, which is widely regarded as the main benchmark for the largest non-financial corporations in the United States. Before we get into how to trade indexes like the NASDAQ 100, let’s take a look at what it symbolizes and which firms are included in it.
To begin, what exactly is the NASDAQ?
The NASDAQ is a New York City-based stock exchange that is the second largest stock exchange in the United States in terms of market capitalization, behind only the New York Stock Exchange (NYSE). NASDAQ Inc. operates the exchange, which was created in February 1971 as the National Association of Securities Dealers Automated Quotations.
To be listed on the NASDAQ, a firm must be registered with the Securities and Exchange Commission (SEC), have at least three market makers, and fulfill the exchange’s basic standards.
What exactly is the NASDAQ 100?
The NASDAQ 100 index is made up of the 100 largest non-financial corporations that are listed on the NASDAQ stock market. The weight of each stock in the index is defined by its market capitalization, which means that the bigger the market capitalisation of a certain component, the greater its effect on the index.
While the index does not comprised only of technology businesses, investors frequently used it to assess the performance of the largest technology companies in the United States, since they account for a sizable portion of it.
How is the NASDAQ 100 determined?
The NASDAQ 100 is made up of 102 shares. This is because some businesses have two share classes, such as Alphabet, which has Class A and Class C shares in the index.
The market capitalization of its members is used to generate the index. The index value is computed by multiplying the latest selling price of each security by the aggregate value of the index share weights of each index security, then dividing by an index divisor. No corporation, however, can have more than a 24 percent weighting in the index.
A number used to determine the nominal value of a price-weighted stock market index is known as an index divisor.
What are the trading hours for the NASDAQ 100?
The following are the NASDAQ trading hours:
Opens at 9:30 a.m. (ET)
Closes at 4:00 p.m. (ET)
Pre-market trading hours are from 4:00 a.m. to 9:30 a.m. (ET), while after-hours trading is from 4:00 p.m. to 8:00 p.m. (ET).
What industries are included in the NASDAQ 100?
The NASDAQ 100 is largely dominated by the technology sector, which accounts for about 60% of the index, as seen in the graph below. Purchasing the index is therefore frequently regarded as a wager on the US technology sector.
The NASDAQ 100 stock price
The NASDAQ 100‘s all-time high is now 16,674 points. The low over the past 52 weeks is 11,878 points.
As shown in the graphic below, the index has had a spectacular performance during the last decade.
How can I trade the NASDAQ 100?
Contracts for Difference (CFDs) are one way to trade the NASDAQ 100 in a cost-effective and efficient manner. Brokers often provide a CFD based on the cash index (USTECH) as well as a CFD based on the underlying futures contract (NAS100.fs).
When you trade the index using CFDs, you may speculate on the underlying instrument’s (NASDAQ 100) direction without owning it or any of its members. You will be able to travel both long and short with the use of leverage.
This is especially important during a recession. Most investors want to avoid portfolio reshuffling since the fees may quickly build up and it is extremely difficult to predict the market accurately. As a result, instead of selling a substantial portion of your portfolio when a downturn is expected, you might utilize CFDs to bet on declining prices.
Whether you should trade cash CFDs (USTECH) or futures CFDs (NAS100.fs) is mostly determined by your trading style. If you only want to maintain holdings for a limited length of time, you may select USTECH due to its modest spreads. However, if you are a long-term trader, you may prefer the NAS100.fs because there are no swap costs.
Aside from the index, MARMARA FX also provides commission-free share CFDs. You may trade significant NASDAQ 100 elements such as Apple, Alphabet, Amazon, Facebook, and Microsoft for a low cost.
How do I invest in the NASDAQ 100?
The most common way to invest in the NASDAQ 100 index is through Exchange Traded Funds (ETFs). It is less expensive than purchasing individual shares, and it is rebalanced on a regular basis.
Because the NASDAQ 100 is a popular commodity, there are several ETFs available. Aside from traditional ETFs that track the index (such as Invesco’s QQQ), there are also leveraged ETFs and ETFs that allow you to gamble against the index (i.e. short the NASDAQ 100). Invesco QQQ, ProShares UltraPro QQQ, and ProShares Ultra QQQ are three of the most popular NASDAQ 100 ETFs.
What factors influence it?
The NASDAQ 100 is impacted by a number of factors that also affect the stock market as a whole. Economic data, interest rates, monetary policy choices, geopolitical events, and natural calamities are all examples of this.
However, because the NASDAQ 100 is heavily weighted in technology and consists nearly exclusively of US-based firms, some variables impact the NASDAQ 100 more than other indexes such as the US2000 or Dow Jones 30.
Earnings releases or corporate news from a heavyweight like Apple or Amazon might have a substantial impact on the broader index.
Furthermore, investors should pay close attention to the stock market’s general risk perception. During “risk-off” times, tech stocks are likely to suffer the most as investors flee riskier stocks in search of safe havens.
What is the average return?
According to a recent NASDAQ analysis, the NASDAQ 100 beat the S&P 500 during a 13-year period, with cumulative total returns almost 2.5 times that of the S&P 500 TR Index.
What does the performance tell us?
Over the last decade, the NASDAQ 100 has outperformed the S&P 500. However, as shown in the chart above, this was accompanied by increased volatility. It is also worth mentioning that the S&P 500 provides more diversity. Not just because it consists of 500 firms rather than 100, but also because the index is not highly dominated by a particular industry, as is the case with the NASDAQ 100.
Despite this, the NASDAQ 100 remains an excellent instrument for following the success of the major technological businesses in the United States. Some investors may decide to buy the index rather than invest in the individual components. The NASDAQ has restrictions in place to prevent a single business from obtaining too much weight in the index, which is beneficial.
What criteria are used to pick the NASDAQ 100 companies?
NASDAQ has numerous eligibility requirements that firms must achieve in order to be included in the NASDAQ 100 index:
Only common equities, ordinary shares, and tracking stocks are eligible for participation.
The stock must be traded on the NASDAQ exchange.
The index can only include non-financial firms.
The stock must have a daily trading volume of at least 200K shares.
The stock must have been actively traded for at least three full calendar months.
The index’s components are chosen by NASDAQ once a year, in December. The index is rebalanced every three months, in March, June, September, and December.
What are the top ten NASDAQ 100 holdings?
The NASDAQ 100 index’s top ten businesses are as follows:
What are the NASDAQ 100 companies?
|AAPL||Apple Inc. Common Stock|
|ADBE||Adobe Inc. Common Stock|
|ADI||Analog Devices, Inc. Common Stock|
|ADP||Automatic Data Processing, Inc. Common Stock|
|ADSK||Autodesk, Inc. Common Stock|
|AEP||American Electric Power Company, Inc. Common Stock|
|ALGN||Align Technology, Inc. Common Stock|
|AMAT||Applied Materials, Inc. Common Stock|
|AMD||Advanced Micro Devices, Inc. Common Stock|
|AMGN||Amgen Inc. Common Stock|
|AMZN||Amazon.com, Inc. Common Stock|
|ANSS||ANSYS, Inc. Common Stock|
|ASML||ASML Holding N.V. New York Registry Shares|
|ATVI||Activision Blizzard, Inc. Common Stock|
|AVGO||Broadcom Inc. Common Stock|
|BIDU||Baidu, Inc. ADS|
|BIIB||Biogen Inc. Common Stock|
|BKNG||Booking Holdings Inc. Common Stock|
|CDNS||Cadence Design Systems, Inc. Common Stock|
|CDW||CDW Corporation Common Stock|
|CERN||Cerner Corporation Common Stock|
|CHKP||Check Point Software Technologies Ltd. Ordinary Shares|
|CHTR||Charter Communications, Inc. Class A Common Stock New|
|CMCSA||Comcast Corporation Class A Common Stock|
|COST||Costco Wholesale Corporation Common Stock|
|CPRT||Copart, Inc. (DE) Common Stock|
|CRWD||CrowdStrike Holdings, Inc. Class A Common Stock|
|CSCO||Cisco Systems, Inc. Common Stock (DE)|
|CSX||CSX Corporation Common Stock|
|CTAS||Cintas Corporation Common Stock|
|CTSH||Cognizant Technology Solutions Corporation Class A Common Stock|
|DLTR||Dollar Tree Inc. Common Stock|
|DOCU||DocuSign, Inc. Common Stock|
|DXCM||DexCom, Inc. Common Stock|
|EA||Electronic Arts Inc. Common Stock|
|EBAY||eBay Inc. Common Stock|
|EXC||Exelon Corporation Common Stock|
|FAST||Fastenal Company Common Stock|
|FB||Meta Platforms, Inc. Class A Common Stock|
|FISV||Fiserv, Inc. Common Stock|
|FOX||Fox Corporation Class B Common Stock|
|FOXA||Fox Corporation Class A Common Stock|
|GILD||Gilead Sciences, Inc. Common Stock|
|GOOG||Alphabet Inc. Class C Capital Stock|
|GOOGL||Alphabet Inc. Class A Common Stock|
|HON||Honeywell International Inc. Common Stock|
|IDXX||IDEXX Laboratories, Inc. Common Stock|
|ILMN||Illumina, Inc. Common Stock|
|INCY||Incyte Corp. Common Stock|
|INTC||Intel Corporation Common Stock|
|INTU||Intuit Inc. Common Stock|
|ISRG||Intuitive Surgical, Inc. Common Stock|
|JD||JD.com, Inc. American Depositary Shares|
|KDP||Keurig Dr Pepper Inc. Common Stock|
|KHC||The Kraft Heinz Company Common Stock|
|KLAC||KLA Corporation Common Stock|
|LRCX||Lam Research Corporation Common Stock|
|LULU||lululemon athletica inc. Common Stock|
|MAR||Marriott International Class A Common Stock|
|MCHP||Microchip Technology Incorporated Common Stock|
|MDLZ||Mondelez International, Inc. Class A Common Stock|
|MELI||MercadoLibre, Inc. Common Stock|
|MNST||Monster Beverage Corporation|
|MRNA||Moderna, Inc. Common Stock|
|MRVL||Marvell Technology, Inc. Common Stock|
|MSFT||Microsoft Corporation Common Stock|
|MTCH||Match Group, Inc. Common Stock|
|MU||Micron Technology, Inc. Common Stock|
|NFLX||Netflix, Inc. Common Stock|
|NTES||NetEase, Inc. American Depositary Shares|
|NVDA||NVIDIA Corporation Common Stock|
|NXPI||NXP Semiconductors N.V. Common Stock|
|OKTA||Okta, Inc. Class A Common Stock|
|ORLY||O’Reilly Automotive, Inc. Common Stock|
|PAYX||Paychex, Inc. Common Stock|
|PCAR||PACCAR Inc. Common Stock|
|PDD||Pinduoduo Inc. American Depositary Shares|
|PEP||PepsiCo, Inc. Common Stock|
|PTON||Peloton Interactive, Inc. Class A Common Stock|
|PYPL||PayPal Holdings, Inc. Common Stock|
|QCOM||QUALCOMM Incorporated Common Stock|
|REGN||Regeneron Pharmaceuticals, Inc. Common Stock|
|ROST||Ross Stores, Inc. Common Stock|
|SBUX||Starbucks Corporation Common Stock|
|SGEN||Seagen Inc. Common Stock|
|SIRI||Sirius XM Holdings Inc. Common Stock|
|SNPS||Synopsys, Inc. Common Stock|
|SPLK||Splunk Inc. Common Stock|
|SWKS||Skyworks Solutions, Inc. Common Stock|
|TCOM||Trip.com Group Limited American Depositary Shares|
|TEAM||Atlassian Corporation Plc Class A Ordinary Shares|
|TMUS||T-Mobile US, Inc. Common Stock|
|TSLA||Tesla, Inc. Common Stock|
|TXN||Texas Instruments Incorporated Common Stock|
|VRSK||Verisk Analytics, Inc. Common Stock|
|VRSN||VeriSign, Inc. Common Stock|
|VRTX||Vertex Pharmaceuticals Incorporated Common Stock|
|WBA||Walgreens Boots Alliance, Inc. Common Stock|
|WDAY||Workday, Inc. Class A Common Stock|
|XEL||Xcel Energy Inc. Common Stock|
|XLNX||Xilinx, Inc. Common Stock|
|ZM||Zoom Video Communications, Inc. Class A Common Stock|
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.58% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.