Nasdaq, originally an acronym for National Association of Securities Dealers Automated Quotations, is a stock market run by the National Association of Securities Dealers. When it began trading on February 8, 1971, it was the world's first electronic stock market. Since 1999, it is the largest American stock exchange with over half the companies traded in the United States listed. Nasdaq is made up of the Nasdaq National Market and the Nasdaq SmallCap Market. The main exchange is located in the United States of America with exchanges in Canada and Japan. They also have associations with exchanges in Hong Kong and Europe.
Nasdaq allows multiple market participants to trade through its electronic communications networks (ECNs) structure, increasing competition. The Small Order Execution System (SOES) is another Nasdaq feature, introduced in 1984, to ensure that in 'turbulent' market conditions small market orders are not forgotten but are automatically processed. On July 17, 1995 the Nasdaq stock index closed above the 1,000 mark for the first time. In the largest civil settlement in United States history, a federal judge on November 9, 1998 approved a US$1.03 billion settlement requiring dozens of brokerage houses (including Merrill Lynch, Goldman Sachs, and Salomon Smith Barney) to pay investors who claimed they were cheated in a wide-spread price-fixing scheme on the Nasdaq.
In 2002 NASDAQ adopted Super Montage or SUMO, which allows market makers show up to 5 levels of their prices. Eventually, SOES was replaced by SUMO.