Over-the-counter stock exchange established in 1971.
Since the late 1700s, stock traders have transacted purchases on the New York and American Stock Exchanges. The
advent and proliferation of computer technology in the
1950s and 1960s led to the first automated price quotation
system that provides information on domestic securities not
listed on the other stock markets, also called over-the-counter
stocks. The Nasdaq, a subsidiary of the National Association
of Securities Dealers (NASD), deals with these over-thecounter stocks and operates under the supervision of the Securities and Exchange Commission. In 1986, Nasdaq Europe
opened in Great Britain after the deregulation of the securities industry in that country. Because investors and brokers
use computers to transact purchases and sales, Nasdaq has
had the capability of operating around the clock since 1999.
In 1998, Nasdaq’s transaction volume totaled $5.8 trillion,
making the exchange second in the world only to the New
York Stock Exchange, which conducted $7.3 trillion in business the same year. During the economic decline of 2000,
Nasdaq dropped significantly, because most of the computer
stocks and dot-com businesses that were overinflated in value
trade on this exchange.
—Cynthia Clark Northrup
References
Ingebretsen, Mark. Nasdaq: A History of the Market That
Changed the World. Roseville, CA: Prima, 2002.