NASDAQ-100 & NASDAQ Composite indexes
The NASDAQ-100 Index was created in 1985 with a
base value set to 250 on February 1 of that year. After reaching
a level of nearly 800 on December 31, 1993, the
Index level was halved on January 3, 1994. At market
close on December 18, 1998, the index methodology was
changed to a “modified capitalization weighting” to
ensure a more diversified index. The new methodology
of the NASDAQ-100 retains the economic attributes
of capitalization weighting; promotes portfolio weight
diversification (thereby limiting domination of the Index
by a few large stocks); reduces Index performance
distortion by preserving the capitalization ranking of
companies; and reduces market impact on the smallest
component stocks from necessary weight rebalancings.
The Nasdaq Stock Market calculates and disseminates the
Index under the ticker symbol NDX every 15 seconds
during the trading day.
Under the new methodology, the component stocks in
the NASDAQ-100 will be evaluated quarterly and
categorized as either large or small stocks. This depends
whether their current weights are greater than the
average weight in the Index (i.e., as a 100-stock index,
the average weight in the NASDAQ-100 Index is 1.0%)
or less than or equal to the average weight in the
Nasdaq futures can be traded online or with a broker.
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