Nasdaq Composite
The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange.
Along with the Dow Jones Industrial Average and S&P 500, it is one of the three most-followed stock market indices in the United States.
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The composition of the NASDAQ Composite is heavily weighted towards companies in the information technology sector.
The Nasdaq-100, which includes 100 of the largest non-financial companies in the Nasdaq Composite, accounts for over 90% of the movement of the Nasdaq Composite.
The Nasdaq Composite is a capitalization-weighted index; its price is calculated by taking the sum of the products of closing price and index share of all of the securities in the index.
The sum is then divided by a divisor which reduces the order of magnitude of the result.
To be eligible for inclusion in the Nasdaq Composite, a security’s U.S. listing must be exclusively on the Nasdaq stock market unless the security was dually listed on another U.S. market prior to 2004 and has continuously maintained such listing, and must be one of the following security types:
American depositary receipts (ADRs)
Common stock / ordinary shares
Limited partnership interests
Real estate investment trusts (REITs)
Shares of beneficial interest (SBIs)
Tracking stocks
Closed-end funds, convertible bonds, exchange-traded funds, preferred stocks, rights, warrants, units and other derivatives are not included in the index. If at any time a component security no longer meets the required criteria, the security is removed from the index.
