NASDAQ 100 Index

Definition

The term NASDAQ 100 refers to a stock market index first created back in 1985 by NASDAQ, a global financial technology, trading and information services provider.  The NASDAQ 100 Index includes equities from 100 of the largest domestic and international non-financial companies.

Explanation

The NASDAQ 100 Index is a portfolio of over 100 common equites issued by 100 of the largest non-financial companies, in terms of market capitalization, listed on the NASDAQ stock exchange.  Companies appearing in the index include computer hardware and software, telecommunications, retail and wholesale trade as well as biotechnology firms.  The index explicitly excludes financial and investment companies since they are included in the NASDAQ Financial 100.  Performance of the index can be monitored using the stock ticker NDX. The index is calculated using a modified capitalization-weight approach.

In addition to market capitalization, companies included in the NASDAQ 100 must:

  • Be listed exclusively on the NASDAQ.
  • Be a publicly-offered stock on an American market for a minimum of three months.
  • Have average daily trading volume of 200,000 shares or more.
  • Remain current with respect to their annual and quarterly financial reports.

In addition to the above criteria, companies included in the NASDAQ 100 cannot be a party to a bankruptcy proceeding.  Finally, if a company appearing in the NASDAQ 100 has multiple classes of common stock, each of these securities will be included in the index.  For this reason, the NASDAQ 100 typically contains over 100 securities.

Related Terms

buying the index, NASDAQ Capital Market Composite, NASDAQ Financial-100 Index, NASDAQ Computer Index, NASDAQ Composite, S&P 500 Index