The NASDAQ 100 is comprised of the top 100 largest non-financial companies listed on the NASDAQ exchange. Some of the leading companies in the index include Amazon, Comcast, Cisco, eBay, Google, Marriott, Viacom, Whole Foods, and Yahoo. Unlike the Dow Jones Industrial Average, the NASDAQ includes companies based outside of the United States (excluding financial companies), and it is considered a modified capitalization-weighted index (such as the S&P 500). This modification reduces the influence of large companies and increases diversification. Don’t confuse the NASDAQ 100 with the NASDAQ Composite Index, which provides an index of all stocks listed on the NASDAQ stock exchange. Meanwhile, if you are looking for excellent brokers who trade NAS100, you can visit http://www.cnie.org/forex/nas100-brokers.html right away.
Here are some things you should know about the NASDAQ100:
In order to be included in the index, a company, among other things, must be specifically listed on the NASDAQ, have an average daily trading volume of 200,000 shares, and produce quarterly and annual reports.
The index is checked annually and accordingly adjustments are made based on the previous year’s share price (starting from the last trading day in October) and the total shares announced to the public (on the last trading day of November). Companies are excluded and included based on their market capitalization value. These changes, if anticipated, often result in changes in the share value of the affected companies. All changes are announced five working days in advance via a press release.
When trading the NASDAQ 100, following the PMI (Pre-Market Indicator) can help. This indicator predicts the opening price based on the last sell price of the pre-market trade and takes overnight news into account, and helps traders predict price movements.
It’s because the stocks traded on the NASDAQ exchange are more tech-oriented, they tend to be more volatile, meaning the index can move fast too. Traders need to keep this in mind when deciding to trade this index.