The Disruption of the Exchange Industry

Until February 8, 1971, the trading of equities was done manually by the first stock exchanges. These first exchanges were run as auction markets that used floor traders to make the trades. In the United States the first auction trading venue was the Philadelphia Stock Exchange (now part of Nasdaq) which began operations in 1790. Throughout the 1800s many other exchanges were launched in London, New York and other large metropolitan cities across the globe.

But disruption of this industry took place, when the National Association of Securities Dealers (the NASDAQ) began to trade securities electronically -- the world’s first electronic stock market. The Nasdaq innovation of the modern exchangeemptywas to rely on market makers to facilitate trading and liquidity in stocks via computers rather than individuals executing trades. New growth technology companies such as Microsoft, Apple, Cisco, and Dell began to list on this new tech-first exchange.


As Nasdaq expanded throughout the ensuing decades, the company merged with the leading global exchange in Europe, OMX, that was also a leading provider of electronic exchange systems for derivatives trading in Europe. OMX was the operator of stock exchanges in Sweden, Finland, Denmark and Iceland. This merger expanded the global footprint of Nasdaq and provided new insights into European operations and trading platforms.

Over the past 3 years:

  • The NASDAQ OMX Group (formed after the merger with OMX) has rebranded and is known as Nasdaq.
  • Nasdaq launched the NASDAQ Private Market to provide public capital to private and start-up companies.
  • Nasdaq acquired index provider and analytics group, Dorsey Wright & Associates, LLC.
  • In 2015, Nasdaq launched Nasdaq Futures (NFX) which has become one of the company’s most successful start-ups with over 100 firms and 110 products, reaching 188,000 daily volume of contracts within the first year.
  • Also that year, Nasdaq completed its first-ever private securities transaction using blockchain technology through its Linq platform.
  • Finally in 2016, the company acquired Boardvantage, Marketwired, ISE, and Chi-X Canada. These acquistions expanded Nadaq’s trading and corporate solutions portfolio and capabilities.

Below is a like to the company’s innovative history.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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