. NASDAQ 100 Index: Overview, Price & How to Trading NASDAQ 100



Instrument- NASDAQ 100 INDEX

Minimum spread- 0.2

Typical spread- 1.8



Minimum nominal trade size- 1000

Overnight interest (annual) sell- -0.60%

Overnight interest (annual) buy- -0.1.70%

Trading hours (GMT) – 24*5

NASDAQ 100 Trading

The NASDAQ-100 was launched on January 31, 1985 by the Nasdaq. It created two indices: the NASDAQ-100, which consists of Industrial, Technology, Retail, Telecommunication, Biotechnology, Health Care, Transportation, Media, and Service companies, and the NASDAQ Financial-100, which consists of banking companies, insurance firms, brokerage firms, and Mortgage loan companies.

Understanding the NASDAQ 100 INDEX

The index is constructed on a modified capitalization methodology. This modified method uses individual weights of included items according to their market capitalization. Weighting allows constraints to limit the influence of the largest companies and balance the index with all members. To accomplish this, Nasdaq reviews the composition of the index each quarter and adjusts weightings if the distribution requirements are not met.

The base price of the index was initially set at 250, but when it closed near 800 on December 31, 1993, the base was reset at 125 the following trading day, leaving the halved NASDAQ-100 price below that of the more commonly known NASDAQ Composite. The first annual adjustments were made in 1993 in advance of options on the index that would trade at the Chicago Board Options Exchange in 1994. Foreign companies were first admitted to the NASDAQ-100 in January 1998 but had higher standards to meet before they could be added.

Factors to keep in mind while trading NASDAQ 100 INDEX

  • Individual Share Price

The weight given to each company included in the Nasdaq100 influences how the individual share price moves the overall index. The index is a weighted collective of share prices; in general, rising share prices will increase the value of the index, and falling share prices will reduce it. It is important to remember that with the Nasdaq100, company shares are weighted differently depending on their market cap.

  • Trader Sentiment

Trader sentiment impacts the Nasdaq 100 by influencing the values of the underlying shares. This trader’s attention causes the underlying share prices inside the Nasdaq 100 to possibly change. Share prices can also climb following an announcement of quarterly earnings or projected growth due to an unexpected outcome.

Major buying or selling of shares of any given company can be enough to move the price as it grabs the attention of more traders. As the underlying assets begin to move, so too does the value of the index.

  • Political Events

Political events have the potential to help or hurt business activity. A new policy may hold the potential to impact an industry’s ability to perform business, which could impact on the whole index, should its component companies be concentrated within the said industry.


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