The NASDAQ was developed in 1971 as the first electronic stock exchange in the world. It was created as a means to increase the trading of Over-the-Counter stocks, those that were unable to meet listing requirements for larger exchanges. 2,500 OTC stocks were traded on the NASDAQ's first trading day, February 8, 1971. By 1975, the NASDAQ displayed only NASDAQ-listed stocks, separating itself from other OTC stocks. Five years later the NASDAQ began displaying inside quotations, which showed the markets best bid and best sell prices on screen. This basically kept the market makers honest, and published spreads (margin between the best bid and best sell) declined on more than 85% of NASDAQ stocks."
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