What it is:
Nasdaq, which stands for the National Association of Securities Dealers Automated Quotation system, is a computerized system for stock trading.
How it works (Example):
The Nasdaq does not have a physical trading floor; it is entirely computerized. The exchange originally operated via telephone, but in 1970 it became computerized. The exchange lists about 5,000.
You often can tell whether a is listed on the Nasdaq (versus the New York Exchange) by looking at its ticker symbol. Nasdaq typically have four- or five-letter symbols (such as Microsoft: MSFT); NYSE ticker symbols (such as McDonalds's: MCD). typically have three-letter
Why it Matters:
The New YorkExchange may be the world's most famous exchange, but the Nasdaq is equally important.