The NASDAQ is a composite index established in 1971 by Gordon Macklin. Initially, the index comprised of just 50 common stocks and corresponding securities but over the years, the number of stocks and securities on the index has grown to 5,073 as of June 2015.
Nasdaq Index Binary Options Trading
The components securities and stock are listed on the NASDAQ Stock exchange and include tracking stock, real estate investment trusts, common stocks and American depository receipts. The stocks and securities included in the NASDAQ composite index are largely those belonging to companies in the information technology sector. Within the NASDAQ composite, there is the NASDAQ 100, which comprises of largest 100 non-financial securities traded on the NASDAQ stock exchange.
Why trade the Nasdaq Industrial Average
• Growth in the technology sector
The NASDAQ is strongly weighted toward the technology sector. This means that the performance of the index majorly depends on the performance of the stock prices of technology firms, some of which include Microsoft Corporation and Apple among others. The technology sector in the U.S. is very robust and is one of the best performing sectors generating impressive returns for investors. This growth in the technology sector has reflected well on the NASDAQ. In particular, exchange-traded funds (ETF) listed on the NASDAQ such as the iShares Russell 1000 Growth Index Fund (IWF), PowerShares QQQ Trust and Vanguard Growth Index Fund (VUG) continue to show great performance due to the growth of the technology sector. Tip: In simple terms, exchange traded funds (ETF) are generally investment funds that are traded on the stock exchanges in the same way stocks are traded. ETF typically track an index. So, an ETF such as PowerShares QQQ Trust tracks the NASDAQ index.
• Better returns from ETFs
The PowerShares QQQ Trust, which tracks the NASDAQ, is the fifth largest EFT in the U.S. in terms of the number of assets under management. Compared to the ETFs of other indexes such as the Dow Jones and S&P500, the PowerShares QQQ Trust offers investors better returns. Tip: The PowerShares QQQ Trust tracks the NASDAQ 100, which is a composite of the 100 largest international and domestic non-financial companies trading on the NASDAQ stock exchange.
• Growth of clouding technology industry
A major reason the NASDAQ 100 will continue to perform better than other composite benchmarks is the rapid growth in cloud technology. Companies such as Google, Microsoft and Oracle are making large investments in positioning their businesses to take advantage of the robust cloud computing technology. This reflects positively on NASDAQ’s performance as a whole.
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Type of available binary options for Nasdaq Industrial Average
The common binary options contract types for NASDAQ Composite Index are:
• Basic Call/Put options: You need to predict whether the price of NASDAQ Composite Index will move up or down prior to the expiry time.
• Touch options: You are required to predict whether the price of NASDAQ Composite Index will touch the given strike price prior to the expiry.
• In/Out: You need to predict if the price of NASDAQ Composite Index will remain within a range of two strike prices.
Possible signals for Nasdaq Industrial AverageU.S. stocks are recovering after major losses with the boost in stock prices being attributed to an impressive performance in tech stocks. This boosted the NASDAQ Composite to a new high. The NASDAQ leaped 73.84 points or an equivalent of 1.58% to 5106.59, a record high.
Factors Influencing Price of Nasdaq Industrial Average
• Trends in the information technology sector such as the burgeoning cloud computing technology.
• Volatility in domestic and international global markets for example the Greek debt crisis.
• Economic data such as interest rates, jobless rates and consumer price trends.