What is the Nasdaq Composite

The Nasdaq Composite (IXIC) is a stock market index that includes only stocks listed on the Nasdaq Stock Exchange (U.S. stock exchange based in New York). The majority of companies forming the index are in the IT sector. The Nasdaq Composite is considered a capitalization-weighted index.

According to "The Motley Fool" - "the Nasdaq Composite is weighted by the market capitalizations of its underlying components. This means that when larger companies' stocks move, it has a greater effect on the performance of the index than when the stocks of smaller companies move."

It is a widely followed stock index in the U.S. and, together with the Dow Jones Industrial Average (DJX: .DJI) and S&P 500 (SP: .INX), makes the "Three Headline" indexes that the market commentators often cite and analyze.

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IXIC undergone high volatility during the past years:

  • 10th March 2000: reached its peak at 5,132.52 for that year;
  • 9th October 2007: closed above 2,800;
  • 29th September 2008: fell below 2,000.
  • 26th November 2013: closed above 4,000 (for the first time since September 7, 2000);
  • 24th December 2018: reached yearly low at 4,147.15;
  • 31st December 2019: closed at 8,972.60;
  • 6th August 2020: reached a new all-time high above 11,000.

Which companies are included in IXIC?

IXIC today includes over 2,500 companies, which is way above the number of companies forming a part of other indexes (eg. SP: 500 companies, Dow: 30 companies).
Some of the most famous companies which are included within IXIC are:

  • Apple(AAPL)
  • Microsoft(MSFT)
  • Amazon(AMZN)
  • Facebook(FB)
  • Tesla(TSLA)
  • PayPal Holdings(PYPL)
  • Intel(INTC)
  • Netflix(NFLX)
  • Adobe(ADBE)
  • And many others.

How can someone trade IXIC

The person can buy IXIC through the exchange, however, the amount that needs to be invested equals the value of the index, at the time.
On the other hand, the person can buy or sell IXIC, as a "Contract for Difference" ("CFD") and trade outside the exchange. This way, he/she will need to invest the portion of the value of the index. IXIC as a CFD is traded with leverage 1:20 which requires less investment rather than trading on actual exchange.

In order to trade IXIC CFD, and be able to enter the market with either "buying" or "selling" (not only buying as required through the exchange) the person should first open a trading account with the Company.