What is the NAS100 Index?

The NAS100 index encompasses 100 prominent non-financial companies listed on the NASDAQ stock exchange in the United States. While one of the popular indices in the American stock market, NAS100 carries inherent risks due to its volatility, potential for substantial price fluctuations, and sensitivity to global economic factors.

In this article, we take a look at the NAS100 index in depth. 

Understanding NAS100

Launched in 1985, The NAS100 is a performance benchmark index of the American economy providing exposure to dynamic sectors like technology, healthcare, consumer services, and more. 

Its inherent volatility and liquidity offer potential for substantial short-term gains, while the global influence of its constituent companies means it responds to international economic trends as well. However, it comes with risks tied to market fluctuations and economic conditions, making informed strategies essential for favorable trading opportunities.

How is the NAS100 index calculated?

The index's value calculation relies on constituents' market capitalizations. Computed by multiplying each stock’s last sale price with the aggregate value of their index share weights, the index value is then divided by an index divisor (a constant used to maintain the consistency of an index's value despite changes in its constituent components) to account for various factors like stock splits and changes. This process captures the collective impact of constituent stock market values on the index, offering insight into their combined performance.

Trading hours of the NAS100 index

The trading hours of the NAS100 index follow the regular trading hours of the NASDAQ stock exchange. These hours are follow Eastern Time, Monday to Friday excluding holidays:

• Pre-market trading: 4:00 AM to 9:30 AM
• Regular market trading: 9:30 AM to 4:00 PM
• After-hours trading: 4:00 PM to 8:00 PM

What moves the NAS100 price the most?

NAS100 experiences are affected by several factors including: 

Share prices

Companies with larger market caps exert a more substantial pull on the NAS100's overall value.

NAS100 price rises as individual company share prices within the index go up, collectively boosting the index value and vice versa.

Trader sentiment

Trader sentiment acts as the catalyst for changes in individual stock prices and further amplifies price movements. 

NAS100 price increases as optimistic traders purchase more shares, driving up demand and pushing prices higher and vice versa.

Political events

Government policies that influence the operational landscape of companies within the NAS 100 can highly affect their gains and, subsequently, their share prices. This, in turn, ripples through the index, shaping its movement and direction either positively or negatively.

NAS100 price rises due to positive government policies benefiting companies, improving their gains and share prices and vice versa.

Company requirements to be included in the NAS100 index

• Listing on NASDAQ: Companies must be listed on the NASDAQ stock exchange, which primarily includes technology-focused and non-financial companies.
• Non-financial focus: The index is composed of non-financial companies, so financial institutions like banks are typically excluded.
• Market capitalization: Companies should have a certain minimum market capitalization, which may change over time, but generally, the included companies are among the largest on the exchange.
• Corporate governance and compliance: Companies must comply with NASDAQ's corporate governance requirements and reporting standards, ensuring transparency and adherence to regulations.

• Legal and financial standing: Companies should have a strong financial standing and meet legal requirements, avoiding any significant financial troubles or controversies.

Ultimately, the decision to include a company is made by the NASDAQ OMX Group Index Committee, which evaluates companies based on quantitative and qualitative factors.

It's important to note that the specific criteria and requirements for inclusion may evolve over time, and companies may be added or removed from the index periodically based on these criteria and the Index Committee's judgment.

Top 5 companies under NAS100 index

1. Apple: Founded in 1976, Apple is a multinational technology company known for its consumer electronics, software, and services, including iconic products like the iPhone and MacBook and has a market capitalization of $2.066 trillion as of 2022.
2. Microsoft: Established in 1975, Microsoft is a global technology corporation renowned for its software products and services, including the Windows operating system and Microsoft Office suite and has a market capitalization of $1.787 trillion as of 2022.
3. Amazon: Founded in 1994, Amazon is a multinational e-commerce and technology conglomerate that has expanded into various industries, including cloud computing and entertainment and has a market capitalization of $856.94 billion as of 2022.
4. NVIDIA Corp: Founded in 1993, NVIDIA is a technology company specializing in graphics processing units (GPUs) and artificial intelligence solutions used in gaming, professional graphics, and data centers and has a market capitalization (cap) of $364.18 billion as of 2022.
5. Meta Platforms Inc: Founded in 2004 as Facebook, Meta Platforms is a social media and technology conglomerate focusing on internet products and services, including Facebook, Instagram, and virtual reality initiatives and has a market capitalization of $319.88 billion as of 2022.

How to trade NAS100?

Directly

Trading the NAS100 index directly involves trading the underlying stocks of the companies within the index in the same proportions as their weights in the index. This requires purchasing shares of each company separately through a brokerage account, and the investment's overall performance would mirror that of the NAS100 index.

However, traders should carefully consider their risk tolerance and investment objectives before choosing to trade the index directly.

CFDs (Contracts for Difference)

Trading NAS100 through CFDs allows traders to speculate on the price movements of the NAS100 index without owning the actual underlying stocks. When one trades NAS100 CFDs, they essentially enter into an agreement with a broker to exchange the difference in the index's value between the opening and closing of the trade. This enables traders to benefit from both rising and falling markets. CFD trading typically offers leverage, allowing them to control a larger position with a smaller capital outlay. However, it's important to be aware of the risks associated with leverage, as it can amplify both gains and losses.

Exploring NAS100 trading opportunities 

Trading the NAS100 can offer various trading opportunities in the US market for both direct CFD traders.

However, it is important to understand the risks associated. The index, like any other stock market investment, is susceptible to market volatility, and its value can fluctuate. Economic conditions, geopolitical events, and industry-specific issues can all have an impact on the index's and underlying companies' performance. Before investing in this index or any other stock market index, traders must analyze their risk tolerance, carry out thorough analysis, and carefully consider their investment plan.