S&P 500 index is one of the most widely used indices after DOW Jones index for following large cap companies. This index is maintained by Standard and Poor’s which is a division of McGraw Hill. The ticker symbol for the S&P 500 index varies. Some examples of the symbol are ^GSPC, .INX, and $SPX.

There are various index funds and exchange traded funds (ETFs) which are based on S&P 500 index. Some of these funds are:

Vanguard 500 Index Fund (VFINX)

Fidelity Spartan US Equity Index Fund Advantage (FUSVX)

E*TRADE S&P 500 Index Fund (ETSPX)

Columbia Large Cap Index Fund (NINDX)

DWS Equity 500 Index Fund (BTIEX)

USAA S&P 500 Index Fund (USSPX)

Rydex S&P 500 A (RYSOX)

Rydex S&P 500 C (RYSYX)

The S&P 500 stock market index, maintained by Standard & Poor’s, comprises 500 large-cap American companies. S&P 500 is a core component of the U.S. indices that could be used as building blocks for portfolio construction. It is also the U.S. component of S&P Global 1200.

Index constituents exhibit the following characteristics:

• Market Coverage – Approximately 75% of the U.S. equities market
• Weighting – Market capitalization
• Market Capitalization – Minimum of US$ 3 billion
• Public Float – At least 50%
• Reconstitution – As needed basis

The companies which constitute this index are:

Related posts:

1. Best Index Funds – Why to invest in index funds?
2. UK blue chip companies – top blue chip companies
3. Stock Market investing for beginners – What is a Stock Market Index?

What are small cap companies?

Small cap companies are those which have the market capitalization between 250 million dollars to 2 billion dollars. Most of the time, small cap companies can trade in any exchanges but you can see most of the small caps on NASDAQ and OTCBB exchanges since the listing rules and regulations are a bit liberal in these exchanges.

Some investors think small caps in a similar way as penny stocks. However, there is a big difference between the two. Usually, penny stocks have a stock price of a few cents but small caps can have stock prices of more than one dollar as well.

Advantages of investing in small caps:

1. Huge growth potential – Since these are small companies, they are lean and mean. Most of the times, these companies are quickest to recover from recession since they are able to mend their ways very fast. Every good contract they get increases the bottom line thus appreciating the value of the share.

2. Since these are small caps, institutional investors don’t touch them until they are recognized. This means that you have the opportunity to find them first before their value appreciates.

3. The recent recession has shown that earnings alone won’t give you returns. If you see blue chip stocks over the last year or so, you will see big blue chip companies like Microsoft (MFST), CISCO (CSCO) and the big car makers having no appreciation at all. Meanwhile, the small caps which are innovative had returns of 2 to 10 times.

4. There are still a lot of opportunities for innovative companies in America. There are a lot of new young entrepreneurs coming up with great innovative ideas unlike dotcoms. If they get the required financial backing, they can make it big.

Some of the best small caps for this year are listed below:

GeoEye Inc. (NASDAQ: GEOY)
Chipotle Mexican Grill, Inc. (NYSE: CMG), (NYSE: CMG.B)
eHealth, Inc. (NASDAQ: EHTH)
PROS Holdings, Inc. (NYSE: PROS)
Zix Corporation (NASDAQ: ZIXI)
Somanetics (Nasdaq: SMTS)
Almost Family (AFAM)
Neutral Tandem (TNDM)
MasTec (MTZ)
Ebix (EBIX)
Thoratec (THOR)
American Italian Pasta Company (AIPC)
Volcano Corp. (VOLC)
Emergent Biosolutions (EBS)
AZZ Inc. (AZZ)
Baytex Energy Trust (BTE)
NVE Corporation (NASDAQ:NVEC)
DG FastChannel Inc. (NASDAQ:DGIT)
Nabi Biopharmaceuticals (NASDAQ:NABI)
Art Technology Group, Inc. (NASDAQ:ARTG)
Sutor Technology Group Ltd. (NASDAQ:SUTR)
Multi-Color Corporation (NASDAQ:LABL)
Orchids Paper Products Company (AMEX:TIS)
Youbet.com, Inc. (NASDAQ:UBET)

Keep in mind that some of these best small caps can give you great returns. Since these stocks are risky as well, a lot of background verification is required while putting in your hard earned money into these small caps. These stocks are good stock investments if done after thorough research and analysis.

Related posts:

1. Investing in stocks – Go buy Best Blue Chip Stocks
2. How to invest in gold for long term investments and for speculation purposes
3. Stock Ticker Symbols – How to read a stock ticker?

You should know that there are two types of quotes – real time quotes and streaming quotes. The streaming quotes are those which you usually see on TV channels and most financial websites. These streaming quotes are generally delayed by around 15 to 20 minutes from real time. Therefore, these are not accurate since the price of stock could have changed a lot in this period. The investors cannot rely on these quotes to make buy or sell decisions.

The other type of quotes is called real time stock quotes. As the name suggests, these are real time quotes giving the true price of the stocks at that particular time. This stock quote is very important to the active traders. There are various ways through which you can get real time stock quotes. There are many websites like Yahoo Finance, CNN Money and Google Finance which provide this information.

These websites have loads of information apart from the real time stock quotes which help investors remain up to date with market news and events. This information also helps the investors to make informed decisions. Most of the websites which offer free online quotes may have some delayed data. Most websites which give real time quotes need you to subscribe to their website by giving some fee. You should be careful while deciding which website subscription you choose. Some websites also provide free trail period as well. If you are going to just use the trial period, make sure that you cancel the subscription before the trial period ends else you will be charged the subscription fee without any notification.

Another factor which should be considered while choosing real time quotes is that you should get quotes from all 3 major exchanges namely New York Stock exchange (NYSE), National Association of Securities Dealers Automated Quotations (NASDAQ) and the American Stock Exchange (AMEX). Some of the real stock quote providers require you to download an executable program and install it on your computer. While this makes the interface easy to use, you should make sure that it is free from any kind of virus. It is always better to subscribe to a reputed website which has a credible history.

Related posts:

1. Free real time stock quotes
2. Historical stocks prices and historical stock quotes – How to get them?
3. Free Stock Quotes – A Good Tool For stock market beginners

NASDAQ components

NASDAQ holidays

Dow Nasdaq and what do they mean to you

NASDAQ ticker

NASDAQ chart

Let us start with NASDAQ history and how it all started. NASDAQ was started in 1971 by the National Association of Securities Dealers and at that time it was just a bulletin board service providing the quotes and there was no way that you can connect buyers and sellers .

Since then it has gone to form the computer based trading where the trades go through a electronic system and the buyers and sellers get connected via computer based trading facility.

As far as the company that owns NASDAQ, it is the NASDAQ-OMX group which now owns the Nordic based exchange OMX also has control of the Philadelphia stock exchange called PHLX and it now as about eight stock exchanges in Europe. It also has the stake in Dubai Stock exchange and that means it is now a serious competition to NYSE -Euronext.

I will explain difference between NASDAQ and NYSE a little later in the post because a stock market for beginners you should know that.

NASDAQ Stands for National Association of Securities Dealers Automated Quotation.

This NASDAQ definition now kind of gives enough insight into what the exchanges was supposed to give originally and how it works in an automated fashion.
NASDAQ after hours trading

NASDAQ offers after hours trading and pre market trading in between the following times which means that you can gauge the market sentiment before the market opens up for that day and also get to trade in the post market session to make sure that you can take part in stock market activity in case of any news and any other big happening after the market close. Then you ca go ahead and buy stock when the market opens.

Pre Market – 7AM-9.30 AM

After hours session is – 4:00PM -8:00PM

What is NASDAQ 100 and what is NASDAQ composite.

These are two main indices which NASDAQ offers and I will explain NASDAQ 100 to help you understand how the NASDAQ index works.

But first the listing of the NASDAQ 100 companies and these companies may change from time to time

Company Name

Activision Blizzard, Inc (ATVI)

Adobe Systems Incorporated(ADBE)

Akamai Technologies, Inc.(AKAM)

Altera Corporation(ALTR)

Amazon.com, Inc.(AMZN)

Amgen Inc.(AMGN)

Amylin Pharmaceuticals, Inc.(AMLN)

Apollo Group, Inc.(APOL)

Apple Inc.(AAPL)

Applied Materials, Inc.(AMAT)

Autodesk, Inc.(AUD)

Baidu.com, Inc.(BIDU)

Bed Bath & Beyond Inc.(BBBY)

Biogen Idec Inc(BIIB)

Broadcom Corporation(BRCM)

C.H. Robinson Worldwide, Inc.(CHRW)

CA Inc.(CA)

Cadence Design Systems, Inc.(CDNS)

Celgene Corporation(CELG)

Cephalon, Inc.(CEPH)

Check Point Software Technologies Ltd.(CHKP)

Cintas Corporation(CTAS)

Cisco Systems, Inc.(CSCO)

Citrix Systems, Inc.(CTXS)

Cognizant Technology Solutions Corporation(CTSH)

Comcast Corporation(CMCSA)

Costco Wholesale Corporation(COST)

Dell Inc.(DELL)

DENTSPLY International Inc.(XRAY)

Discovery Communications, Inc(DISCA)

DISH Network Corporation(DISH)

eBay Inc.(EBAY)

Electronic Arts Inc.(ERTS)

Expedia, Inc.(EXPE)

Expeditors International of Washington, Inc.(EXPD)

Express Scripts, Inc.(ESRX)

Fastenal Company(FAST)

Fiserv, Inc.(FISV)

Flextronics International Ltd.(FL;EX)

FLIR Systems, Inc.(FLIR)

Focus Media Holding Limited(FMCN)

Foster Wheeler Ltd.(FWLT)

Garmin Ltd.(GRMN)

Genzyme Corporation(GENZ)

Gilead Sciences, Inc.(GILD)

Google Inc.(GOOG)

Hansen Natural Corporation(HANS)

Henry Schein, Inc.(HSIC)

Hologic, Inc.(HOLX)

IAC/InterActiveCorp(IACI)

Infosys Technologies Limited(INFY)

Intel Corporation(INTC)

Intuit Inc.(INTU)

Intuitive Surgical, Inc.(ISRG)

Joy Global Inc.(JOYG)

Juniper Networks, Inc.(JNPR)

KLA-Tencor Corporation(KLAC)

Lam Research Corporation(LRCX)

Lamar Advertising Company(LAMR)

Leap Wireless International, Inc.(LEAP)

Level 3 Communications, Inc.(LVLT)

Liberty Global, Inc.(LBTY)

Liberty Media Corporation(LMDI)

Linear Technology Corporation(LLTC)

Logitech International S.A.(LOGI)

Marvell Technology Group, Ltd.(MRVL)

Microchip Technology Incorporated(MCHP)

Microsoft Corporation(MSFT)

Millicom International Cellular S.A.(MICC)

Monster Worldwide, Inc.(MWW)

NetApp, Inc.(NTAP)

NII Holdings, Inc.(NIHD)

NVIDIA Corporation(NVDA)

Oracle Corporation(ORCL)

PACCAR Inc.(PCAR)

Patterson Companies Inc.(PDCO)

Paychex, Inc.(PAYX)

PetSmart, Inc(PETM)

QUALCOMM Incorporated(QCOM)

Research in Motion Limited(RIMM)

Ryanair Holdings plc(RYA)

SanDisk Corporation(SNDK)

Sears Holdings Corporation(SHLD)

Sigma-Aldrich Corporation(SIAL)

Sirius XM Radio Inc.(SIRI)

Staples, Inc.(SPLS)

Starbucks Corporation(SBUX)

Steel Dynamics, Inc.(STLD)

Stericycle, Inc.(SRCL)

Sun Microsystems, Inc.(JAVA)

Symantec Corporation(SYMC)

Teva Pharmaceutical Industries Limited(TEVA)

The DIRECTV Group, Inc.(DTV)

VeriSign, Inc.(VRSN)

Vertex Pharmaceuticals Incorporated(VRTX)

Virgin Media Inc.(VMED)

Whole Foods Market, Inc.(WFMI)

Wynn Resorts, Limited(WYNN)

Xilinx, Inc.(XLNX)

Yahoo! Inc.(YHOO)

There are certain criteria as to why and how the company is included into the index but primarily the main criteria is

1. The security’s U.S. listing must be exclusively on the Nasdaq National Market (unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing);

2. The security must be of a non-financial company;

3. The security may not be issued by an issuer currently in bankruptcy proceedings;

4. The security must have average daily trading volume of at least 200,000 shares;

NASDAQ 100 is the stock market index of 100 largest domestic and international non-financial companies on the NASDAQ. This index is the modified market value weighted index, which essentially means that companies have weights based on the market capitalization.

Two main differences between NASDAQ 100 and Dow Jones and S&P 500 is that these companies do exclude non financial companies from being part of the index and also these do not have the non US companies in the index which NASDAQ does have.

Again I will explain what is difference between NASDAQ-100 and the NASDAQ Composite which is commonly referred to as the NASDAQ in the media.

NASDAQ composite is the stock market index of all the common stocks and similar securities which includes ADR’s, tracking stocks and limited partnership interests. What this means is that NASDAQ composite has about 3000 components which practically all the stocks that are listed on the NASDAQ.

It is followed very thoroughly as an indicator of the performance of the US economy and that means that it is a true indicator of the health of the technology stocks and the growth stocks.

When NASDAQ composite was launched

NASDAQ composite was launched in 1971 with a base of 100 points and this index is market capitalization weighted.

Here is what the NASDAQ site has to say about it as far inclusion criteria goes “To be eligible for inclusion in the Composite the security’s U.S. listing must be exclusively on the Nasdaq Stock Market (unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing), and have a security type of either:

American Depositary Receipts (ADRs)
Common Stock
Limited Partnership Interests
Ordinary Shares
Real Estate Investment Trusts (REITs)
Shares of Beneficial Interest (SBIs)
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. ”

Something on the NASDAQ Penny Stock List

Penny stocks have no minimum listing requirements and hence they are traded on the OTCBB exchange and as far as the penny stocks on NASDAQ go they were there when the tech bubble burst but they either have to shore up their balance sheets or they have to delist.a Always research properly before investing.

Related posts:

1. Explain NASDAQ for beginners
2. NASDAQ 100 pre market indicator and the NASDAQ 100 after Hours Indicator
3. EMini Trading – E-mini S&P 500, E-mini NASDAQ and Emini Dow Jones

Of course you would have heard stories about the 1929 crash or the 1987 stock market crash and it being called the Black Monday. On that day the stock market index called the Dow Jones Index plummeted by 22.6% and shed 508 points.

What is Dow Jones Industrial Average and what does it mean for you stock market for beginners investor.Does the moment reflects a loss or a gain for you and how can you earn by tracking the movement of the index.

Another name for the Dow Jones Industrial Average is DJIA or Dow 30 or simply The Dow or Dow Jones. It was created by the Wall Street Journal editor and co-founder of the Dow Jones & Company Charles Dow.

DJIA consists of 30 stocks of the largest and most widley held public companies of the United States. This in mathematicla terms is price weighted average of the 30 stocks. To calculate this the sum of all the prices of the 30 stocks is divided by a divisor. This dow divisor is actually less than one and is adjusted for any stock splits or changes occurring to the underlying 30 stocks.

So you would argue that Dow Jones is really the average of the 30 stocks only and does not reflect the whole market. Yes, correct some would argue but on other side you have those 30 stocks across industries and as widely held as possible which are more likely to give an indication of the market moods and directions and also you can compare the average historically to gain more insights into the macro trends of the market.

Several other indexes are now popular since with the advent of technology and many other exchanges. A few notable indexes among them are

NASDAQ -100, S&P 500, Russell 300, FTSE30(for theLondon stock exchange,BSE 30(India – Bombay Stock Exchange) or the Hang Seng Index(Hong Kong stock Exchange).

As you learn the stock market for beginners basics, the movement of the index would give you some idea of how the health of the economy is and how the stock market is taking it. On the other hand it may sometimes mean that even though the stock market index is rising you particular stock may not be because of lot of other factors like the industry it is in, the management of the company and how that individual company is doing in terms of the market expectations.

In this age a lot of stock market traders rely on a combination of indices like a sector specific index as well as broader index like Dow Jones or S&P 500 to track the progress of the overall market as well as the sector in which their stock is.

So as a beginner you should for now keep track of the progress of the index to gauge the market sentiment but be aware of the industry,the management,the sector your stock is in to make money by trading in stocks.

Related posts:

1. Explaining the Dow Jones Index for beginners – what is DJIA
2. Understanding the Stock Market for beginners
3. Stock Market Terms – S&P 500 Index, S&P 500 index funds and S&P 500 companies

But ever wondered how does the stock market work and what goes in into making such kind of money in the stock market.

Do not get intrigued by the stock market but just start by understanding the stock market and getting to know the very basic terms and how the stock market functions.

A few basic explanations of the terms that will help you get the understanding of the stock market basics are described below.

What is a stock? The simple answer to this question is that it represents the ownership of the company’s assets and profits. The ownership may be if you start to calculate in percentage terms may represent only .005% of a company or even lesser based on how much shares are issued to the public from the total number of shares.

What is a stock exchange? Let us look from the angle that you are .005% owner of a company and would want to sell your portion of the company to somebody else. That avenue where you would go to sell those shares is what is called a Stock Exchange.

Physical Stock Exchange – New York Stock Exchange is an example of a physical stock exchange. By physical it means that in theory you can go there and sell your share of .005% though in all practicality you will not be allowed to do so and what you would need to do is contact a stock broker or a brokerage firm who would in turn contact somebody who is allowed to buy and sell shares on the floor of the exchange and these
brokers would charge you a fee or brokerage for selling your shares.

Online Stock Exchange – In today’s world of computers and advanced technology, you would need to leave your house and try to sell your share. All you would need is an account with a firm authorized to trade on the virtual stock exchange. This virtual stock exchange eliminates the need to have a physical place to buy or sell shares. On such stock
excahge which you hear very commonly is National Association of Securities Dealers Automated Quotations System or NASDAQ.

What is a share price ? Let us say that your share of .005% is in great demand and somebody would be willing to a pay higher price than what you would have bought it at. That means you have made a profit or else the negative can happen that it is not in great demand since the company is not doing good then you may have to sell at a lower price. So, really at any given point of time there are people who think the company is doing
good and would be willing to pay you a higher price or some people who would be willing to sell at that price as they have made a decent amount of profit and are willing to get out or they think that the price is likely to go down and they are trying to sell the same share.

Stock Market for beginners can be challenging and treacherous to navigate but if you play your strategies right, you can definitely reap some handsome rewards.

Related posts:

1. Understanding the stock market investing for beginners
2. Stock Market investing for beginners – What is a Stock Market Index?
3. Finding Stock Symbols – A Must Know For Stock Market Beginners