If you're thinking about NASDAQ trading, the NASDAQ composite index contains all of the stocks that are listed on the NASDAQ. The NASDAQ composite index is one of the most-watched indexes in the world because it has companies that promise high growth. It consists of more than 4,000 companies. You’ll have plenty of stocks to choose from if you decide to trade them individually. One factor you’ll need to consider is that the exchange is volatile because it’s speculative.
If you want to be a successful trader, you must know all of the indices that make up NASDAQ. These indices consist of stocks that are Internet and high technology companies. When considering trading NASDAQ indices, you want to use them in the following ways:
- Use the NASDAQ 100 index as your guide for investing in NASDAQ companies
- Trade telecommunications stocks using the NASDAQ telecommunications index
- Trade biotechnology stocks using the NASDAQ biotechnology index
Use the NASDAQ 100 index for investments in NASDAQ companies
The NASDAQ-100 index only lists non-financial companies. In other words, you will not find any banks or other financial service companies listed here. The NASDAQ 100 index consists of the largest domestic and international companies that are listed on the NASDAQ. There are currently 13 foreign companies listed on this NASDAQ equity index.
Use the NASDAQ telecommunications index for investments in telecommunications companies
The NASDAQ Telecommunications index contains a list of telecommunications companies that promise growth and high returns. This includes manufacturers and providers of land line, cellular, and fiber optic technologies.
Use the NASDAQ biotech Index for investments in biotechnology companies
The NASDAQ biotechnology index consists of biotechnology companies, based on the Industry Classification Benchmark. These companies are leaders or pioneers in discovering new drugs or advanced technologies to combat diseases. Biotechnology covers a large area, including pharmaceutical, genetics, bio-chemistry, and other disciplines.