The Nasdaq 100 Index consists of 100 of the largest domestic and
international companies listed on the Nasdaq National Market (which is part of
the Nasdaq Stock Market). The companies that are included in the index are
selected based on their market capitalization. The Nasdaq 100 reflects major
industry groups, including computer hardware and software, telecommunications,
retail/wholesale trade, and biotechnology, but it excludes the banking and
investment sectors (and is therefore considered a non-financial index).
The Nasdaq 100 was launched in January 1985. The Index is assembled using a
modified capitalization-weighted methodology, which retains the economic
attributes of capitalization-weighting while providing enhanced diversification.
To accomplish this, Nasdaq reviews the composition of the Nasdaq 100 on a
quarterly basis and adjusts the weightings of its index components using a
Its great number of constituent stocks makes the Nasdaq 100 an effective
vehicle for investors. In January 1994, options based on the Nasdaq 100 Index
began trading on the Chicago Board Options Exchange. The Chicago Mercantile
Exchange began trading futures and futures options on the Nasdaq 100 in April of
1996. In March 1999, the Nasdaq 100 Index Tracking Stock (QQQQ) began trading on
the American Stock Exchange.