Nasdaq 100

The Nasdaq 100 is an ‘index’ consisting of just over 100 of the largest traded companies on the Nasdaq Stock exchange. In order to qualify firms are required to meet strict financial reporting standards alongside meeting a minimum quantity (volume) of shares traded daily. This collection of shares performs a point of reference for a large percentage of market participants indicating both condition and performance. The Nasdaq 100 is heavily weighted toward tech firms, but also includes representation across sectors including healthcare, sciences, fintech, and retail. It is worth noting that the traditional banking sector is excluded from the Nasdaq 100. A comprehensive list of the Nasdaq’s constituents is linked below.

The Nasdaq works by taking a basket of the top company shares outlined above and tracking their share price throughout the 5-day trading week, with the value determined by a system of complex mathematical equations. You can track both the price and performance of the Nasdaq 100 under the stock ticker $NDX (Nasdaq & TradingView links are listed below).

These indexes can be traded through smaller exchange traded funds (ETFs), which by design track the performance of the underlying asset. Offered at lower prices, these are accessible to a wider range of market participants, allowing them to invest in index performance without having to purchase and track the weightings of the individual index  constituents. An example of a Nasdaq 100 tracking ETF is the ishares Nasdaq 100 UCITS ETF ($CNDX).

I use the Nasdaq 100 as one of my four, arguably somewhat vague reference points when quickly assessing US market activity and performance. Although I do not make decisions solely upon index activity, I do utilise performance to provide market insights, without losing time sifting through often misleading and time-consuming news content. Additionally, market spectators can build an understanding of price reaction to different news events and market catalysts such as political updates and economic data prints allowing them to form anticipations of future movement.

Comprehensive list:
https://markets.businessinsider.com/index/components/nasdaq_100?p=1

Price Trackers:
https://www.nasdaq.com/market-activity/index/ndx
https://www.tradingview.com/chart/?symbol=NASDAQ%3ANDX