1. By George Lyons

2. NASDAQ is an abbreviation for the National Association of Securities Dealers Automated Quotation system. The world's first electronic stock market Two separate markets: –The Nasdaq National Market – lists over 4,000 securities –The Nasdaq SmallCap Market – lists over 1,000 securities

3. History 1971 - On February 8, Nasdaq begins trading. 1984 - Small Order Execution System (SOES) becomes ready for use to execute small orders 1994 - Nasdaq surpasses the New York Stock Exchange in annual share volume.

4. 1999 - Nasdaq becomes the largest stock market in the U.S. by dollar volume and repeatedly breaks share and dollar volume records. 2000 - Begins to restructure the trading system. 2000 - Nasdaq formally opened the new MarketSite in the heart of New York's Times Square.

5. Nasdaq MarketSite has a 120 x 90-foot display that is the largest in the world Consists of almost 19-million light-emitting diodes and covers roughly a 10,736-square-foot area, rising more than eight floors. Its not a "flat-panel display," but a cylindrical display that conforms to the curvature of the building at the southest corner of Broadway and west 43rd street.

7. How a trade is executed No trading floor like the Dow Jones Broadcast to more than 360,000 computer terminals worldwide. All Nasdaq participants equal access to the market

8. Investor places a Market Order Buy or sell at market price The multiple Market Makers in a Nasdaq stock continuously quote prices at which they will buy and sell the stock The current market price reflects the best of the prices displayed by the multiple market makers- the highest bid (best price to buy) and the lowest ask (best price to sell) of all the market maker quotes.

9. The investor could call a broker and they would purchase the stock at the best bid price OR The investor could use an on-line trading account to place an order electronically. The trade is then executed by a Market Maker or an ECN (Electronic Communications Networks) at the current best price

10. Other types of trades: Limit Order - investor sets the price at which to buy. When price falls to the investor’s ask price, trade automatically occurs. Short Selling – Market Makers sell shares to an investor or another Market Maker without having the shares in his or her trading account. Used in anticipation of a market down-turn.