What is Nasdaq 100?

The Nasdaq 100 Index (ticker: NDX) is the equity index comprised of the 100 largest companies listed on the Nasdaq market. For those unfamiliar with the term Nasdaq, it stands for National Association of Securities Dealers Automatic Quotations.

Currently, Nasdaq is one of the largest stock exchanges in the world. Setup in 1971, Nasdaq has a longstanding history of hosting growth company. It gained its popularity because Nasdaq was the first exchange to trade stocks electronically. At that time, it was a quantum leap in share trading. (see GMG’s Guide To Nasdaq)

Currently, some of the world’s biggest tech companies are components of the Nasdaq 100. For example, the five largest stocks of the index are Apple, Microsoft, Amazon, Facebook and Google (see below):

Nasdaq 100 is capitalisation weighted, this means that companies with higher market capitalization carry a higher weightage in the index.

Compare NASDAQ Trading Platforms

We’ve compiled a list of some of the best brokers for trading the NASDAQ (US Tech 100) including City Index, IG, CMC Markets, Pepperstone and Saxo Markets. All brokers in this list are authorised and regulated by the FCA and we have personally tested each platform, interviewed the company CEOs, and compared costs, fees, market access, and the different types of account for trading the NASDAQ.

Featured NASDAQ Trading PlatformAccount OptionsNASDAQ CostsFinancing ChargesMore Info

City Index

CFDs
Spread Betting
Pro Account
1 Point SpreadsSOFR +/-2.5% Overnight FinancingSee Offer70% of retail investor accounts lose money when trading CFDs with this provider
Interactive Brokers review

IBKR

CFDs
DMA
Futures
Options
Investments
Pro Account
0.005% CommissionOvernight Financing Info Not AvailableSee Offer
60% of retail investor accounts lose money when trading CFDs with this provider

CMC Markets

CFDs
Spread Betting
Direct Market Access
Pro Account
1 Point SpreadsSOFR +/-3% Overnight FinancingSee Offer66% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider

Pepperstone

Index CFDs
Spread Betting
Pro Account
1 Point SpreadsSOFR+/-2.5% Overnight FinancingSee Offer79.3% of retail investor accounts lose money when trading spread bets and CFDs with this provider


Saxo Markets

Index CFDs
Pro Account
Investments
Futures & Options
1 Point SpreadsSAXO RATE +/-2.5% Overnight FinancingSee Offer
70% of retail investor accounts lose money when trading CFDs with this provider

Markets.com

Index CFDs
Spread Betting
Pro Account
1 Point SpreadsSOFR +/-3.75% Overnight FinancingSee Offer77% of retail investor accounts lose money when trading CFDs with this provider

Spreadex FinancialsSpreadex

Index CFDs
Spread Betting
Pro Account
2 Point SpreadsSOFR +/-3% Overnight FinancingSee Offer
69% of retail investors lose money when trading spread bets and CFDs with this provider

IG

CFDs
Spread Betting
Direct Market Access
Pro Account
Investments
1 Point SpreadsSOFR +/-2.5% Overnight FinancingSee OfferYour capital is at risk. 73% of retail CFD accounts lose money
FXTM

FXTM

Index CFDs
Pro Account
1 Point Spreads+/-5.4% Overnight FinancingSee Offer
77% of retail investor accounts lose money when trading CFDs with this provider
XTB review

XTB

CFDs
Pro Account
3 Point Spreads+/-2.5% Overnight FinancingSee Offer
77% of retail investor accounts lose money when trading CFDs with this provider

Can you trade the Nasdaq 100 Index?

Yes, you can. There are multiple financial products derived from the underlying Nasdaq 100 Index that you can trade with, including:

  • Futures
  • Options
  • Exchange-Traded Funds (link)
  • Investment Funds
  • Spread trading

Read the GMG Guide on Index Trading.

The biggest ETF based on the Nasdaq 100 Index is the QQQ ETF (ticker: QQQ). For many years, this ETF is one of the most traded instruments in the US market. Investors like to gain exposure to the Nasdaq through this ETF.

What is the attraction of Nasdaq 100?

Nasdaq Indices (100 and Composite) are the most-followed equity indices in the world. NDX is attractive to investors and traders alike because:

  • Nasdaq 100 is a growth index – you can participate in the best success stories
  • Nasdaq 100 offers good liquidity – some of the NDX components were the most valuable in the world at one time or another (Apple, Microsoft, and Amazon)
  • Nasdaq 100 offers better relative performance than many other large-cap indices

Moreover, the Index is volatile enough to attract traders. Therefore, daily liquidity of the index is good.

What drives the Nasdaq 100?

Stock markets are driven by a wide variety of factors, including some of the following:

  • Macro factors (e.g. GDP, unemployment, business indicators etc)
  • Monetary factors (e.g., Quantitative Easing, rates movements, yield curve etc)
  • Technical factors (e.g., new highs)

For the Nasdaq 100, another factor to watch out for is speculative bubble.

During the nineties, for example, Nasdaq stocks soared amidst a wave of speculative trading interest. Companies worth only millions only a short while ago attained multi-billion valuation – only to see these valuation figures collapsed to zero when the bubble burst. Easy come, easy go.

Next, if you are trading NDX short term, you will need to pay attention to news flow and data announcements because they can have massive impact on the index over the short term.

Another area to watch out for are Federal Reserve meetings and the release of FOMC minutes. Any change in interest rates beyond market expectations can cause violent swings in the SPX. For example, if investors were expecting a 0.25% hike but the central bank raised it by 0.5% – this may cause prices swing massively after the announcement.

Studying the reaction of the market to these factors are important.

How to trade the Nasdaq 100 using technical indicators?

To trade the Nasdaq profitably requires a good trading strategy, of which technical indicators may come in handy. Technical indicators include:

  • Trend indicators like moving average
  • Price action
  • Oscillators
  • Support & resistance levels (see GMG Guide on Support/Resistance)
  • Patterns like breakout and reversals

For example, you may use the moving averages to judge whether the index is still trending or due for a reaction.

Another favourite indicator is a break of resistance or support levels. Look at the Nasdaq 100 ETF (QQQ) below. It was clear that the breakout above the 195 key resistance last month resulted in a persistent rally into 204 (see below). This resistance, now broken, may even convert into resistance.

Bear in mind, however, the different traders will gravitate towards different trading styles. Therefore you must find the technical indicators that best support your trading objectives.

Alternative Indices For The Nasdaq (Composite and Nasdaq 100) Index Trading

You can read about the major indices in our guide to the best indices for index trading.

Some quick fire reviews of the best brokers for trading NASDAQ 100/US-TECH 100

IG

IG are the largest spread betting and CFD broker in the World having invented the concept for financial spread betting. They offer one of the widest range of markets and are listed on the LSE.

Saxo Markets

Saxo Markets cater to more high networth and professional traders as they also offer futures, options and professional trading tools.

ETX Capital

Spread betting broker ETX Capital enjoys a long-standing reputation as a heavyweight on the broker scene. Formed in 1965, it’s a member of the LSE and has won a string of industry awards consistently throughout the decades.

Check out all of our trading & investing broker expert reviews.

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