What the NASDAQ actually is

Three different things share the same name, and mixing them up is the first place new traders get lost. Separate them once and most market commentary starts making sense.

One: the exchange

The Nasdaq Stock Market is a place where shares change hands, the same way the New York Stock Exchange is a place. Thousands of companies are listed on it. When a headline says a company 'listed on the Nasdaq,' this is the meaning. It tells you almost nothing about price direction.

Two: the Composite

The Nasdaq Composite (ticker IXIC) is an index tracking essentially every company listed on that exchange — thousands of names. It is the number the evening news quotes. It is broad, it is weighted by company size, and it is not what most traders actually trade.

Three: the Nasdaq-100

The Nasdaq-100 (NDX) is the 100 largest non-financial companies on that exchange. This is the one that matters to us. It is the index behind the QQQ ETF and behind NQ futures — the instrument traded in the live sessions. When we say 'the NASDAQ' on the floor, we mean this.

The instruments

• NDX — the index itself. A number, not something you buy.
• QQQ — an ETF that tracks it. Trades like a stock, in shares.
• NQ — the futures contract. Nearly 24-hour access, leveraged, and what gets traded in the live sessions.

Same underlying market, three different vehicles, three very different risk profiles. Leverage is why NQ demands the risk framework before anything else — a small move in the index is a large move in the account.