How are NASDAQ Indexes calculated?

Most NASDAQ Indexes are calculated on a market capitalization basis. The NASDAQ-100 and NASDAQ Biotechnology Indexes are calculated on a modified market capitalization basis which is a hybrid between equal weighting and conventional capitalization weighting. The NASDAQ-100 Equal Weighted and the NASDAQ Biotechnology Equal Weighted Indexes are calculated on an equal weighted basis.

What is the formula used for determining the Index Value?

Index Value = Aggregate Index Market Value/ Divisor

The Aggregate Index Market Value is the NOCP multiplied by the Index Shares for each security in the Index added together.

The Divisor serves the purpose of scaling the aggregate Index Value to a lower order of magnitude which is more desirable for Index reporting purposes.

Ordinarily, whenever there is a change in Index Shares, a change in a component security or a change to the price of the security due to spinoffs, special cash dividends or rights issuances, NASDAQ adjusts the Divisor to ensure that there is no discontinuity in the value of the Index, which might otherwise be caused by any such change.

What is the formula used for determining the Divisor?

Divisor = (Aggregate Index Market Value after Adjustments/Aggregate Index Market Value before Adjustments) X Divisor before Adjustments

When are changes made to NASDAQ Indexes?

All changes to NASDAQ Indexes including component changes, shares changes, and non-routine price changes due to spin-offs, special cash dividends or rights issuances take place during the system maintenance process which occurs after the market has closed. These adjustments will result in value changes to the current market value and Divisor, but will not in and of themselves alter the level of an index.

Are NASDAQ Indexes adjusted for cash dividends?

In general, NASDAQ Indexes are price return indexes and the market value and the Divisor are not adjusted for cash dividends however those noted specifically as total return indexes are adjusted for cash dividends.

How is an index adjusted for stock splits and stock dividends?

The price of a security is adjusted for stock splits and stock dividends and a corresponding change in the shares occurs such that there is no change in the market value of a security. This process occurs during the system maintenance process which occurs after the market has closed.

What securities are eligible for inclusion in NASDAQ Indexes?

In general, securities eligible for index inclusion are foreign or domestic common stocks, ordinary shares, ADRs, shares of beneficial interest or limited partnership interests, and tracking stocks. Security types not included in the Index are closed-end funds, convertible debentures, exchange traded funds, preferred stocks, rights, warrants, units and other derivative securities.

How does NASDAQ determine which NASDAQ sector index a company belongs?

Companies are placed in NASDAQ sector indexes based on the Industry Classification Benchmark subsector assigned.

Where can I get information on NASDAQ Indexes?

General constituent information on NASDAQ Indexes can be found by clicking on an index name from the home page of this site and also on NASDAQ.com. Additionally, you can download and print a NASDAQ Indexes fact sheet which serves as an overview of all NASDAQ Indexes.Index component weighting and/or other information can be found within data products that NASDAQ offers on a subscription basis. NASDAQ Index Component and Weighting information offers current days� index holdings. NASDAQ Index Watch offers daily and historical index holdings information and summary statistics as well as index news, historical component changes and industry breakdown for selected indexes. Information on these products can be found at nasdaqtrader.com.

Can I use NASDAQ Indexes as the basis for financial products?

NASDAQ licenses its indexes for a variety of financial products. Please click here for information on licensing.