NASDAQ, the first electronic securities market without a trading hall, was founded in 1971. The shares in the market had been more than 5700 by May 31, 2004. The Chinese public companies here have been 15. Three parts make up NASDAQ stock exchange: The NASDAQ National Market, NASDAQ Small Cap Market, and OTCBB (Over The Counter Bulletin Board). Among the public companies in NASDAQ, finance category occupies 19%, technology 18%, manufacturing 11%, communication 70%. At present 93.6% of the software industry, 84.8% of the semiconductor industry, 84.5% of the computer and peripheral units, 87.1% of the communication industry have been public in NASDAQ. The famous high-tech companies like Microsoft, Intel, Yahoo, ipod and Dell as well as some foreign companies like TOYOTA, Ecricsson, Canon, NEC, China Qiaoxing Universal, China.com, Yaxin, Sina, Netease, are listing in the market too. The trading volume of the NASDAQ from 1990 to 1998 has been increased 1120%, far higher than the 452% of the NYSE. And NASDAQ has been the winner of the shares trading volume increase.

Not long ago many companies have been proud of being public in NASDAQ. NASDAQ becomes the names for technology and new public companies. In 2002, the fall of the four kings in NASDAQ – Microsoft, Cisco, Intel and Dell leads to the lowest return rate in the composite Index in the history, that is, 39.2%. Meanwhile NASDAQ is the most speculative stock market. The listed Qualcomm in here increase d by 3000% in 1999, eToys (ETYS) 99%.

·Trading Features & Quotation Systems

The trading feature of NASDAQ is transaction over the counter. Differed from membership system, over-the-counter market is a market made up by thousands of dealers in securities without a formal organization. Clients give orders of buying or selling stocks to bank brokers or dealers, who contact other securities dealers or brokers through telephones or Internet to finish the transaction. In America, over-the-counter market is under the management of NASD.

The quotation system used by NASD is National Association of Securities Dealers’ Automated Quotation System (NASDAQ), which is a specific computer system for quotation of the aftermarket shares. The biggest feature is that its system of automatic matching and reporting t back concluded price could replace many stock quotation and trade information many people cannot get. This can raise the stability of the system trading when big share price change happens in NASD, unlike the NYSE, where transaction breaks as soon as stock price decreases in short time.