What is Nasdaq? Everything You Need to Know About the US Stock Exchange

Published on September 18, 2026 | 11 min read

Nasdaq is a US stock exchange where investors can buy and sell shares of publicly listed companies. Let’s understand in detail how Nasdaq works.

Key Takeaways

Nasdaq is an electronic stock exchange based in the US (United States of America) where investors can buy and sell shares of publicly listed companies.
Nasdaq, an acronym for National Association of Securities Dealers Automated Quotations, was established in 1971 as the world's first electronic stock market and the second-largest stock exchange in the world by market value.
Though Nasdaq is an American-based stock exchange, it includes many prominent international companies as well.
Indian investors wanting to invest in US stocks can do so via Upstox, which provides seamless access to thousands of US-listed companies.

Indian investors can now invest in US stocks from India via trusted and authorised brokers like Upstox. But they must understand how the US stock market works before investing.

The US has 29 registered national securities exchanges authorised by the US Securities and Exchange Commission (SEC), but Nasdaq and the New York Stock Exchange (NYSE) are the most prominent stock exchanges by trading volume.

Let’s learn about Nasdaq, one of the most dominant stock exchanges in the US market.

What Is Nasdaq?

The Nasdaq stock exchange is one of the two major American stock exchanges in the US where investors buy and sell shares of listed companies. Initially, Nasdaq was used as an acronym for National Association of Securities Dealers Automated Quotations before the company shortened its official name. The Nasdaq Stock Exchange is owned and operated by its parent company, Nasdaq Inc. (ticker: NDAQ).

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The Nasdaq was founded in 1971 as the world’s first electronic stock market, where instead of shouting their orders, traders could execute their trades through a network of computers and market makers.

The Nasdaq stock exchange is the second largest in the world by market value after the New York Stock Exchange (NYSE) and is famous for listing IT giants such as Apple, Microsoft, and Amazon.

The Nasdaq stock exchange features benchmark indices such as the Nasdaq Composite, which tracks the overall performance of more than 3,000 stocks listed on the exchange, and the Nasdaq 100, which tracks 100 of the biggest non-financial listed companies. Investors often monitor these indices to determine the overall performance of the stock market.

What Stocks Are Listed on Nasdaq?

The Nasdaq stock exchange predominantly hosts companies belonging to technology, consumer discretionary, healthcare, consumer staples, and telecommunications and utilities. There are over 4,000 global and domestic companies listed on the following Nasdaq market tiers.

Nasdaq Global Select Market

This market tier consists of large-cap US and international companies' stocks that meet the world's most stringent financial, liquidity, and corporate governance standards.

Nasdaq Global Market

Formerly known as the Nasdaq National Market, this tier consists of mid-sized global companies.

Nasdaq Capital Market

This market tier is an entry-level tier that consists of early-stage, smaller companies and start-ups with lower market capitalisations.

What Is the Nasdaq Composite?

The Nasdaq Composite is a benchmark index launched by the Nasdaq that tracks the performance of over 3,000 stocks listed on the exchange. The index consists of nearly all domestic and international listed companies along with ADRs (American Depositary Receipts) and REITs (Real Estate Investment Trusts).

Tech giants and companies with higher market capitalisation heavily drive the movement of the Nasdaq Composite.

What Is the Nasdaq 100?

The Nasdaq 100 is another benchmark index that tracks the performance of the top 100 of the largest non-financial companies listed on Nasdaq. Investors track the index to gauge the performance of the world's largest non-financial and technology innovators that drive modern market growth.

Nasdaq Composite vs Nasdaq-100

Let’s understand the difference between Nasdaq Composite and Nasdaq 100 indices.

Feature	Nasdaq Composite	Nasdaq 100
Number of Holdings	The index consists of over 3,000 common equities listed on the exchange.	The index consists of only 100 large-cap and non-financial listed companies.
Financial Sector	Financial sector companies are included in the index.	Financial sector companies are not included in the index.
Weighting Method	Uses the market capitalisation method to weigh the components.	Uses a modified market capitalisation method.
Diversity	Consists of broad sector representation.	The index is heavily concentrated in large-cap tech.
Reconstitution	The Nasdaq Composite index is reconstituted continuously or daily.	The Nasdaq 100 is reconstituted annually in December and rebalanced quarterly.

Nasdaq Trading Hours

The Nasdaq stock exchange is open for regular trading from Monday to Friday, 9:30 a.m. to 4:00 p.m. Eastern Time (ET), i.e 7:00 p.m. to 1:30 a.m. IST (Indian Standard Time) during Daylight Saving Time, and 8:00 p.m. to 2:30 a.m. IST during standard time.

The pre-market time starts from 4:00 a.m. to 9:30 a.m. ET, which corresponds to 2:30 p.m. to 8:00 p.m. IST, and the after-market hours start from 4:00 p.m. to 8:00 p.m., i.e 1:30 a.m. to 5:30 a.m. IST.

By December 2026, Nasdaq plans to introduce an overnight trading session from 9:00 p.m. to 4:00 a.m. ET, creating a nearly 23-hour trading day.

How Do Companies Get Listed on Nasdaq?

To get listed on the Nasdaq stock exchange, companies have to meet strict financial, liquidity, and corporate governance standards and submit a formal application. Here’s how companies get listed on Nasdaq.

1. Choose a Market Tier

The Nasdaq stock exchange is divided into three market tiers: Nasdaq Global Select Market, Nasdaq Global Market, and Nasdaq Capital Market. As per the company’s characteristics, the company chooses a market tier.

2. Meet Core Quantitative Requirements

The companies planning to list on Nasdaq must fulfil specific baseline financial and share metrics depending on the chosen market tier:

Share Price An initial minimum bid price of $4.00 per share, with certain closing price alternatives of $3.00 or $2.00 if additional criteria are met.
Public Shares The company must have at least 1 million to 1.25 million unrestricted publicly held shares.
Market Makers The company must have at least 3 to 4 active registered market makers for the stock, depending on whether it satisfies the requirements of the Nasdaq Global Market Income Standard or Equity Standard set by Nasdaq.
Financial Standards Companies must comply with at least one financial path, such as specific pre-tax earnings over three years, cash flow requirements, or asset-to-equity limits.

3. Satisfy Corporate Governance Standards

All tiers require adherence to strict corporate governance rules set by the US Securities and Exchange Commission (SEC) and Nasdaq, which includes maintaining a majority-independent board of directors, having properly functioning audit and compensation committees, and holding regular annual shareholder meetings.

4. Submit the Application and Pay Fees

The company must complete the formal Nasdaq Initial Listing Guide, submit a listing application, execute a listing agreement, and provide audited financial statements under US GAAP (United States Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards).

Companies have to pay a non-refundable application fee and entry fees ranging based on the number of shares outstanding. Nasdaq will evaluate the application, review public and regulatory filings, and provide comments typically over a 4 to 6-week review cycle before final approval.

How Does Nasdaq Make Money?

Nasdaq Inc. organizes its business and revenue into three primary segments:

1. Market Services

Nasdaq earns profit on trading services provided as it charges a fee for buying and selling shares, options, and fixed-income securities on its exchange. The revenue increases and decreases based on the trading volume of the exchange.

2. Capital Access Platforms

The company listing on Nasdaq pays initial and annual fees to list its shares on the stock market. The exchange also sells real-time and historical pricing data, order book information, and analytics tools to financial institutions and investors, increasing its total revenue.

Financial firms also have to pay licensing fees to create index-linked products such as ETFs that track Nasdaq indices.

3. Financial Technology

Nasdaq sells software systems, risk management tools, and regulatory compliance technology to other global exchanges, financial institutions, and regulators. It also earns subscription income from anti-financial-crime and workflow software

How Can Indian Investors Invest in Nasdaq?

Here’s how Indian investors can invest in Nasdaq.

Indirect Investment via Indian Mutual Funds or Funds of Funds

Indian investors can invest in Indian mutual funds or Funds of Funds (FoFs) that track the Nasdaq 100 index to gain exposure to US stocks. You can start an SIP (Systematic Investment Plan) in these funds for as low as ₹500, depending on the scheme. Investors do not need to have an international remittance or special overseas trading account and all transactions happen in Indian Rupees (INR), eliminating the confusion caused by currency differences.

Direct Investment via International and Indian Brokers

Today, Indian investors can directly invest in the US stock market via international brokers as well as Indian brokers such as Upstox. All they have to do is open an overseas trading account through the broker’s platforms, complete digital KYC, and transfer funds under the Reserve Bank of India's Liberalised Remittance Scheme (LRS). This allows investors to buy US-listed Nasdaq 100 ETFs, or individual shares of tech giants.

LRS remittances exceeding ₹10 lakh in a financial year 20% Tax Collected at Source (TCS) may apply, which can be claimed back during ITR filing.

Investing through an international broker helps investors have full control over their investments, invest in fractional shares, and gain direct dollar-denominated exposure.

Advantages and Risks of Trading on Nasdaq

The following are the advantages and risks of trading on Nasdaq.

Category	Advantages	Risks
Market Focus and Growth	Traders gain access to major global tech innovators such as Apple, Microsoft, and Amazon with strong historical growth and high return potential.	The stock exchange's high concentration in tech makes the index sensitive to sector-specific downturns. Nasdaq has fewer traditional blue-chip or defensive companies that offer stability.
Trading System	Nasdaq offers a fully electronic system, enabling fast trade execution and tight spreads. Since the market has significantly high daily trading volume, it offers high liquidity too.	A competing market maker model can lead to higher intraday volatility. Trading highly volatile, speculative, and smaller-cap stocks can trigger rapid losses if the market moves against you.
Execution and Strategy	Nasdaq is best suited for active short-term strategies like day trading, scalping, and swing trading due to the wide availability of derivative products such as CFDs, futures, and ETFs.	Derivative trading on margin carries the risk of swift margin calls and liquidation.

Nasdaq is one of the major stock exchanges in the US and also the world’s first electronic stock exchange. The exchange features indices such as the Nasdaq 100 and Nasdaq Composite. These are used as benchmarks for investors to gauge overall market performance.

Understanding how the Nasdaq stock exchange works is the first step towards investing confidently in US stocks, especially tech stocks, as Nasdaq mainly hosts tech companies. Earlier, investing in the US stock market was possible only through global ETFs or domestic mutual funds, but today Indian investors can invest in US stocks via Upstox.

FAQs

What is Nasdaq?

Nasdaq is an American stock exchange where people buy and sell shares of listed companies.

What is the difference between Nasdaq and NYSE?

Nasdaq and NYSE (New York Stock Exchange) are two major stock exchanges in the US. While Nasdaq is a fully electronic stock market predominantly hosting tech companies, the NYSE relies on both digital systems and a physical trading floor.

What types of companies are traded on Nasdaq?

Tech companies such as Apple, Microsoft, Amazon, and Google etc are traded on Nasdaq.

What is the Nasdaq Composite Index?

The Nasdaq Composite Index is a market indicator that tracks the overall performance of over 3,000 stocks listed on the Nasdaq stock exchange.

How can Indian investors invest in US stocks?

Indian investors can gain exposure to the US stock market by opening an international trading account with Upstox, a trusted and authorised broker.

About Author

Mariyam Sara

Sub-Editor

holds an MBA in Finance and is a true Finance Fanatic. She writes extensively on all things finance whether it’s stock trading, personal finance, or insurance, chances are she’s covered it. When she’s not writing, she’s busy pursuing NISM certifications, experimenting with new baking recipes.