What Does NASDAQ Stand For?

What does NASDAQ stand for, piece by piece?

So the name meant, roughly, "the dealers' association's automated quote system." Notice that the acronym uses the letters NASD for the group's whole name, then adds A and Q. People say it as one word, "NAZ-dak," which makes it an acronym in the strict sense. Initialisms and acronyms are compared on what is an acronym.

From quote system to stock exchange

Before 1971, many smaller company stocks were traded "over the counter," with dealers calling each other on the phone to agree on prices. The new automated system put those quotes on screens, which made trading faster and prices easier to compare. It is often described as the first electronic stock market.

Over the following decades it added more features and more companies. Eventually it separated from the dealers' association that created it and became a full, registered national securities exchange, regulated by the SEC like other US exchanges. That is why the old meaning of the letters no longer describes what Nasdaq does today.

What people mean when they say "the Nasdaq"

The word can point to three related things, and news stories switch between them freely:

• The exchange. "The company will list its shares on the Nasdaq."
• The Nasdaq Composite index, a broad average of the stocks listed there. "The Nasdaq fell 1 percent today" usually means this index.
• The Nasdaq-100, an index of about 100 of the largest companies on the exchange that are not financial firms.

NASDAQ stands for something it no longer is

Many organizations outgrow their original initials, and Nasdaq is a good example. The dealers' association behind the name has since been folded into a different regulatory body, and the exchange is now a public company in its own right. The letters stayed because the name was already famous.

For that reason, mixed case is the usual style today: Nasdaq. All capitals, NASDAQ, still appears in older writing, on some charts and when people want to show the acronym. Both forms are understood.

Money terms that travel with Nasdaq

Stories about the exchange often use other short forms:

• IPO, initial public offering, is when a private company first sells shares to the public, often by listing on an exchange.
• ETF, exchange traded fund, is a fund that trades like a stock. Some ETFs are built to follow the Nasdaq-100.
• GDP reports and other economic news can move stock prices for the day.

For more office and money shorthand, see the business acronyms guide.

Using the word in sentences

• "The startup hopes to list on Nasdaq next spring."
• "Both the Nasdaq and the broader market rose this week."
• "My grandfather remembers when NASDAQ was just a quote screen."
• "The Nasdaq-100 is heavy with technology companies."

Use the before it when you mean the exchange or the index: "the Nasdaq." Since the word begins with an N sound, write a before it as an adjective: "a Nasdaq listing."