A modified capitalization-weighted index that includes the largest non-financial U.S. and non-U.S. companies listed on the NASDAQ stock market across a variety of industry groups, such as retail, healthcare, telecommunications, wholesale trade, biotechnology, and technology. The index is designed to limit the influence of a few large stocks. To be included in the index, companies must meet some general guidelines: Companies listed in the NASDAQ 100 have been publicly traded for two years, are listed on the NASDAQ National Market (made up of the largest stocks), and have an average daily trading volume of at least 200,000 shares. Companies must not be in bankruptcy or involved in a potential merger transaction. NASDAQ reviews the companies in the index quarterly in order to adjust the weightings. The NASDAQ 100 began in January 1985.
An exchange-traded fund (ETF), QQQ, tracks the NASDAQ-100 Index. It allows large investors to buy or sell shares in the collective performance of the NASDAQ 100 Index in a single transaction as if purchasing or trading just one stock. QQQ trades on the American Stock Exchange and is one of the most actively traded ETFs.