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Legal Dictionary
NASDAQ, formerly an acronym for the National Association of Securities Dealers Automated Quotation system, is a computerized system established by the National Association of securities Dealers (NASD) to facilitate trading by providing broker/dealers with current bid and ask price quotes on over-the-counter stocks and some listed stocks. It is the largest electronic stock market in the U.S. All trading on the NASDAQ exchange is conducted electronically, by phone or computer, and there is no physical trading floor, such as the Amex and NYSE have. Also, the NASDAQ does not employ market specialists to buy unfilled orders like the NYSE does. The NASDAQ started when informal telephone trades were made between brokers, but not formally established and linked by computer until the 1970's. Average daily volume in NASDAQ-listed securities as of October 2004 was 1.78 billion, outpacing that of both the NYSE and the AMEX. NASDAQ is the primary market for trading NASDAQ-listed stocks.