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Your guide to trading the NASDAQ 100 index

Capital.com’s guide to trading the NASDAQ 100: everything you need to know on how to trade the NASDAQ 100 using an award-winning platform. No commission. FCA and CySEC regulated.
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Why is the NASDAQ 100 index important to traders?

The NASDAQ 100 index is an index of the 100 largest and most actively traded companies listed on the NASDAQ stock exchange. The index serves as a benchmark index for US technology stocks, though it also includes companies in the retail, industrial, biotechnology and health sectors.

Traders enjoy following the NASDAQ 100 index because it offers exposure to substantial market price action and day-to-day fluctuation. The NASDAQ today is known for its volume and volatility compared to the other major indices, and is protected by the safety of strict US regulation, oversight and federal exchange rules.

NASDAQ 100

NASDAQ 100 trading hours

The main trading hours for the NASDAQ 100 index are between 09:30 and 16:00 (EST), though the NASDAQ index price is also calculated during pre-market trading hours (04:00 – 09:30 EST) and after-market trading hours (16:00 – 20:00 EST).

You can trade the NASDAQ index live 24 hours a day with Capital.com and monitor price changes using our NASDAQ 100 chart.

How to trade NASDAQ 100 CFD

The NASDAQ 100 price typically provides traders with a high degree of liquidity, long trading hours and tight spreads. Some of the largest technology firms in the global marketplace are NASDAQ 100 companies.

You can trade the NASDAQ 100 index live using CFDs (contracts for difference). Using CFDs to trade the NASDAQ 100 will allow you to go long or short without having to deal with conventional exchanges.

The NASDAQ 100 is a way to gain exposure to the US technology sector without having to analyse the performance of individual companies. The index is full of volume and volatility constituting a wide cross-section of liquid trading instruments, making the NASDAQ 100 popular with CFD traders around the world.

How is the NASDAQ 100 calculated?

Like other global stock market indices, the NASDAQ 100 index tracks a basket of individual companies, and changes in their share prices will affect the index throughout the trading day.

The value of the NASDAQ 100 index equals the aggregate value of the index share weights of each security, multiplied by each security’s last sale price and then divided by the divisor of the index.

In order to trade on the NASDAQ 100 index, the company must be exclusively listed on the NASDAQ in either Global Select or Global Market tiers. NASDAQ listed companies must also:

  • Have an average daily volume of 200,000 shares
  • Be publicly offered for at least three months
  • Be free from bankruptcy proceedings
  • Submit both quarterly and annual reports

The NASDAQ 100 is capitalisation-weighted, which means that companies with bigger market caps will have a bigger influence on the NASDAQ 100 index price.

Companies trading on the NASDAQ today are reviewed quarterly – they are added or removed based on the size of their market cap. No company can have more than a 24% weighting.

But the NASDAQ 100 should not be confused with the NASDAQ Composite: the latter includes around 3,000 stocks that are traded on the NASDAQ exchange. The NASDAQ 100 is responsible for 67% of the total market cap of the larger, more general NASDAQ Composite.

Why trade NASDAQ 100 CFD with Capital.com

Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative SmartFeed offers a range of materials to put him back on the right track. The neural network analyses in-app behaviour and recommends videos and articles to help polish your investment strategy. This hopefully helps you refine your approach when you trade NASDAQ 100.

Trading on margin: Providing trading on margin (20:1 for major indices), Capital.com gives you access to the NASDAQ 100 index with the help of CFDs.

Trading the difference: By trading CFDs on the NASDAQ 100 index, you don’t buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of its price. CFD trading is no different from traditional trading in terms of its associated strategies. A CFD investor can go short or long, set stop and limit orders  and apply trading scenarios that align with his or her objectives. So whether your view is positive or negative, you can trade NASDAQ 100 in both directions.

All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Captal.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.

Businesses on the NASDAQ 100

A list of the current companies trading on the NASDAQ 100 today, correct as of October 2018:

Name Sell Buy Chg%

You will notice that NASDAQ 100 companies mostly belong to the technology sector. Big technology corporations like Apple and Amazon are included in the NASDAQ 100 index.

History of the NASDAQ 100

The NASDAQ 100 was launched on 31 January 1985 with an initial base price of 250. However, after the price reached almost 800 on 31 December 1993, the price was reset to 125 the following day.

At launch, the NASDAQ 100 sought to promote itself in the shadow of the New York Stock Exchange (NYSE) by creating the two separate indices that we know today: the NASDAQ 100, which consists of companies in the industrial, technology, retail, telecommunication, health, transportation, media, biotechnology and science sectors; and the NASDAQ Financial 100, which consists of banks, insurance firms and credit brokerage companies.

In creating these two separate indices, the NASDAQ hoped options and futures would be traded on them, and mutual funds would adopt them as benchmark measures.

The NASDAQ 100 has a record closing high of 7,660.18, which was set on 29 August 2018, and an intraday high of 7,700.56, which was achieved on 1 October 2018. During the 2008 financial crisis, it reached a 6-year intraday low of 1,018 on 20 November 2008.

Performance of the NASDAQ 100

See the NASDAQ 100 index performance, historical data and chart below:

NASDAQ 100 chart

FAQ

The NASDAQ Composite is an index of over 3,300 equities that are listed on the NASDAQ stock exchange. Unlike the NASDAQ 100, it includes common stocks, real estate investment trusts and tracking stocks. The NASDAQ Composite also includes all NASDAQ-listed stocks that are not derivatives, preferred shares or exchange-traded funds.

The PowerShares QQQ is an exchange-traded fund that tracks the NASDAQ 100 index. It consists of all stocks in the index. It is rebalanced quarterly and reconstituted annually.

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