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Trading the NASDAQ 100

The NASDAQ 100 index represents the 100 largest non-financial NASDAQ-listed stocks by market capitalisation.

During the infamous ‘dot com boom in 1999-2000, the NASDAQ was followed particularly closely as many of the new economy companies like Amazon and Google, as well as hardware manufacturers like Dell and Intel, are included in the index.

The index has a reputation for being heavily laced with technology companies and firms which have grown up recently, rather than the more established shares investors will find on the New York Stock Exchange.

The index is re-adjusted on a quarterly basis, but the emphasis is on reflecting the economic importance of the constituent companies, many of which are large corporations in the fields of technology, bio-science and retail.

Amongst the big names in the index can be found Apple [NASDAQ:AAPL], Cisco Systems [NASDAQ:CSCO] and Genzyme [NASDAQ:GZTR] as well as non-technology game changers like Starbucks [NASDAQ:SBUX].

You can trade the Nasdaq 100 in a number of different ways, the most popular of which are as  a future or options contract, an Exchange Traded Fund, or as a Contract for Difference.

CME Group has an extensive list of futures products based on the price of the Nasdaq, and it is easier than ever for an individual to open an account with an approved broker to trade CME Group futures – simply ensure you have a futures-enabled trading account. You can find a list of futures brokers here or find more educational resources on The Armchair Trader on how to trade futures on the Nasdaq.

Additionally, you can explore any number of index-linked investment products that will track the Nasdaq. If you are a UK resident, you can also trade the index through a tax-free spread betting broker.

When looking for a trading product that tracks the index you will frequently find it using the word ‘tech’ in its name rather than simply ‘NASDAQ’ due to licensing issues. This is due to the perceived bias towards technology and bio-technology companies in the index.

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