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"The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange."

How is this calculated and decided on?

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From Wikipedia, the index consists of the 100 "largest" companies (by market capitalization) that meet certain requirements.

The requirements for being eligible for the index are:

The NASDAQ has over the years put in place a series of stringent standards that companies must meet before being included in the index. Those standards include the following:

  • Being listed exclusively on NASDAQ in either the Global Select or Global Market tiers.
  • Being publicly offered on an established American market for three months.
  • Having average daily volume of 200,000 shares.
  • Being current in regards to quarterly and annual reports.
  • Not being in bankruptcy proceedings.

and the calculation of "size" is market ca; (share price * number of shares outstanding, using the following values:

There are two tools the NASDAQ uses to determine the market values of companies for the annual review:

  • Share Prices as of the last trading day in October.
  • Publicly announced share totals as of the last trading day of November.

Note that if a company falls out of the top 100, it does not necessarily get removed from the index immediately (see the Yearly rebalancing and re-ranking section)

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