Technical Analysis NASDAQ Index Futures
About NASDAQ CompositeDespite the fact that the NASDAQ Composite is actively used to analyze the quotations of securities of the high-tech sector, it includes companies from a wide variety of industries. Its value is calculated based on all issuers whose stocks are listed on the NASDAQ exchange.
The absence of a capitalization requirement leads to an interesting effect - there are both industry giants and small companies in the NASDAQ index basket.
At the initial stage, the capitalization requirement was not introduced so that young IT companies could get into the basket. As a result, the basket of the NASDAQ Composite index includes both Apple with a capitalization of over $ 3 trillion, and, for example, the little-known Cemtrex with a capitalization of only a few million dollars.
The NASDAQ Composite index includes representatives of the medical sector, the biotechnology sector, companies working on space exploration, in the aircraft industry. There are representatives of the financial sector, the service sector.
Accordingly, now the index includes securities of more than 2,500 companies, only a part of which belongs to the high-tech sector. NASDAQ Composite futures contracts are traded on the Chicago Mercantile Exchange (CME).
The NASDAQ Composite Index has been calculated since 1971. When the index was created, NASDAQ was the only electronic trading platform in the world. This led to an emphasis on the high-tech sector and helped attract such companies as Oracle, Dell, Apple. The value of the index began at 100 points, at that time the Nasdak index included only 50 companies.
The composition of any index is not a static value, it is constantly being adjusted, new companies are added, and those that do not meet the requirements are removed.
The index is calculated at the weighted average prices of all its components. This means that the largest companies in terms of capitalization are able to exert the most significant influence on the value of the NASDAQ Composite.
On the Chicago Mercantile Exchange, E-mini Nasdaq Composite Futures are ticked with the ticker symbol QCN. Their volume is equal to the value of the underlying index multiplied by $ 20.
Unlike the S&P 500 and the like, the NASDAQ index includes securities of issuers from several countries, which is why it is considered global. It mainly includes stocks of fast-growing companies traded on the NASDAQ. The most famous of them include: Adobe, Apple, com, Cisco, Columbia Sportswear, Dropbox, eBay, Expedia, Meta, GoPro Inc, Hasbro, Intel, Logitech, Marriott, Marvel, Microsoft, Nasdaq Inc, Netflix, NVIDIA, Paypal, Papa John’s, Qualcomm, Seagate, Silicon Labs, Starbucks, Tesla, TESSCO, TripAdvisor, Western Digital.
Changes to the NASDAQ list are made frequently - when new companies are listed on the exchange. However, the most significant elements of the index, as a rule, remain practically unchanged.
The NASDAQ Composite rate is calculated taking into account the "weight" of the shares of each company, that is, the larger the capitalization, the more it affects the result of the calculation. The index is calculated by analogy with the weighted moving average.
The stocks price is multiplied by their number, the results are summed up and divided by a special divisor. Division is necessary to bring the value of the NASDAQ index to a convenient value for reporting.
Recalculation is performed every second. At the end of each trading session, the last value of the index is published at 04:16 p.m. Eastern Time (GMT-04: 00).
NASDAQ Composite is just one of a large family of indices of the exchange with the same name. In addition to the summary indicator, it also includes:
NASDAQ 100 (NDX) - is a global index that includes 100 high-tech companies from the USA, Canada, Israel, Singapore, India, Sweden, Switzerland, Ireland and China.
NASDAQ Biotecnology Index (NBI) - is an American index calculated on the basis of pharmaceutical and biotechnology companies' securities.
NASDAQ US Small Cap - is an index that includes small-cap companies listed on the same-name stock exchange.
NASDAQ US 1500 - is an integral part of the previous index, which includes up to 1500 of the largest companies in the small-cap segment.
NASDAQ Internet - is an index consisting of securities of issuers operating in the field of Internet business and listed on the NASDAQ or NYSE.
NASDAQ Insurance - is an index that includes NASDAQ-listed securities of companies from the insurance industry.
NASDAQ Computer (IXCO) - is an industry index based on issuers from the exchange of the same name operating in the industry of computer services and equipment, the Internet, software and semiconductors.
NASDAQ Transportation - this index includes the securities of airlines and transport companies.
NASDAQ Telecommunications - is an industry index that includes shares of issuers from the field of telecommunications and the production of related equipment.
NASDAQ Industrials (INDS) - the focus is on industrial companies.
NASDAQ Bank Index (BANK) - calculated for companies operating in the banking sector.
NASDAQ Global Equity Index (NQGI) - the focus is on the largest companies in the world, the index basket consists of more than 9000 instruments.
NASDAQ PHLX Semiconductor (SOX) - compiled based on the value of stocks of companies involved in the production of semiconductors.
This is not a complete list of indices from NASDAQ, in addition to those listed there are families of indices dedicated to emerging markets, dividend companies, "green" companies (working to reduce environmental damage).
Let's also note the so-called smart indices, which allow identifying the most liquid sectors of the economy. There are also commodity indices created for grain, oil, gold and other commodity market instruments.
Traders can trade with:
- IXIC futures;
- options on futures on the NASDAQ Composite and other sub-indices.
You can also invest in ETFs that copy the NASDAQ index. For example, an ETF with the ONEQ ticker offers a management fee of just 0.21% - a good option for long-term investment. Other ETFs include:
- Invesco QQQ Trust (QQQ) – копирует NASDAQ 100.
- iShares Nasdaq Biotechnology ETF (IBB) - copies another NASDAQ Biotechnology Index sub-index.
- First Trust NASDAQ 100 Technology (QTEC) - Copies the NASDAQ 100 sub-index.
The NASDAQ Composite remains in fact the largest high-tech index in the world. It is very sensitive to crisis phenomena, but it allows you to earn money through prolonged periods of growth.