NASDAQ-100 Index (NAS100): Overview,Trends,and Trading Guide

The NASDAQ-100 Index (NAS100) is one of the most significant stock indices in the United States. This article will cover its overview, component stocks, recent trends, and trading methods to provide useful references for traders.

What is the NASDAQ-100 Index (NAS100)?

The NASDAQ-100 Index is composed of the 100 largest and most actively traded non-financial companies listed on the NASDAQ exchange.

This index spans multiple industries, including technology, telecommunications, biotechnology, media, and services, with a heavy weighting in technology stocks. Key companies include Apple, Amazon, Alphabet (Google's parent company), and Meta Platforms (Facebook's parent company).

The NASDAQ-100 Index is considered a key indicator for technology stocks and is often used by investors to evaluate the performance of the tech industry.

Components of the NASDAQ-100 Index (NAS100)

Below is the list of the top 10 components of the NASDAQ-100 Index as of April 2024:

Rank	Ticker	Component Name
1	MSFT	Microsoft Corp
2	AAPL	Apple Inc
3	NVDA	NVIDIA Corp
4	AMZN	Amazon.com Inc
5	GOOG	Alphabet Class C
6	GOOGL	Alphabet Class A
7	META	Meta Platforms Inc
8	AVGO	Broadcom Inc
9	TSLA	Tesla Inc
10	ASML	ASML Holding NV

Calculation Method of the NASDAQ-100 Index (NAS100)

The NASDAQ-100 Index is a market capitalization-weighted index, meaning its calculation is based on the market capitalization of its components. Market capitalization is determined by multiplying a company's stock price by the total number of its outstanding shares. Larger companies have a greater impact on the index, while smaller companies have less influence.

Calculation Formula

The NASDAQ-100 Index is calculated by summing the adjusted market capitalizations of all its components and dividing it by a divisor known as the "NASDAQ-100 Index Divisor." This divisor ensures the continuity of the index when changes occur, such as stock splits or adjustments in the number of components.

Adjustment Mechanism

The NASDAQ-100 Index undergoes regular adjustments to its components, typically in January and July each year, to reflect changes in company market capitalizations. Special adjustments may occur when significant changes, such as mergers or bankruptcies, happen to the component companies.

Exceptions

While the NASDAQ-100 Index primarily includes non-financial companies, there are specific listing and trading activity requirements that companies must meet to be included.

By using this calculation method, the NASDAQ-100 Index provides a clear overview of market performance, particularly in the most influential companies within the tech and innovation sectors. This is why it is widely used to evaluate the performance of technology and large-cap non-financial stocks.

Recent Trends in the NASDAQ-100 Index (NAS100)

The NASDAQ-100 Index has been influenced by numerous global economic and political factors in recent years. These include the rapid development of the tech industry, changes in the global economic environment, and periodic market volatility. Below are some key trends and events from recent years:

2019

In 2019, the NASDAQ-100 Index performed strongly. Technology stocks, particularly giants such as Apple, Microsoft, Amazon, and Facebook, saw significant growth, driving the index upwards. By the end of the year, the index had risen approximately 35%, primarily due to solid corporate earnings and optimism about the tech sector.

2020

The outbreak of the COVID-19 pandemic in early 2020 significantly impacted the global economy and stock markets. Initially, the NASDAQ-100 Index experienced sharp declines in February and March. However, the surge in demand for remote work and online services led to a rapid rebound in tech stocks. Companies in sectors such as remote communication tools, cloud computing, and e-commerce performed exceptionally well, resulting in a remarkable annual increase for the index.

2021

In 2021, the NASDAQ-100 Index continued its upward trend, driven by the digital economy and technological innovation. The index repeatedly reached new highs during the year. However, concerns about inflation and interest rate changes occasionally caused market fluctuations. Overall, the index demonstrated the tech sector's resilience and growth potential.

2022

In 2022, global economic uncertainties increased due to factors such as rising inflation, monetary tightening by major central banks, and geopolitical issues. These pressures weighed on the stock market, particularly high-valuation tech stocks. The NASDAQ-100 Index experienced volatility, reflecting market reactions to these risks.

2023

By 2023, the performance of the NASDAQ-100 Index continued to depend on the results of tech giants and overall market sentiment. The tech sector sought new growth opportunities amidst economic slowdowns and changing market conditions.

How to Trade the NAS100 Index

After opening a Titan FX trading account, you can trade NASDAQ-100 Index (NAS100) CFDs on the MT4 and MT5 platforms.

Register a Titan FX Trading Account

Step 1: Log in to Your Trading Account

Download the MT4/MT5 platform, then log in using your account credentials.

Step 2: Add NAS100 to "Market Watch"

Right-click in the "Market Watch" window, click "Symbols," and double-click "indices" to find "NAS100." This will display the NAS100 quote in the "Market Watch" window.

Step 3: Trade NAS100

Double-click the NAS100 quote or open the NAS100 chart to begin trading.

Conclusion

The global economic environment and U.S. domestic policies, especially monetary and fiscal policies, will continue to influence the trajectory of the NASDAQ-100 Index.

Key factors such as the Federal Reserve's interest rate decisions and government spending plans are critical for investor confidence and consumer spending, indirectly affecting the performance of tech companies and their stocks.

The future trajectory of the NASDAQ-100 Index will likely be shaped by growth driven by innovation and market volatility. Global economic trends, policy changes, and the performance of key tech companies will be crucial determinants.

Investors should closely monitor these variables and flexibly adjust their investment strategies to navigate potential market fluctuations.