How to trade or invest in the NASDAQ
The NASDAQ 100 is one of the most famous indices in the world, boasting companies like Microsoft, Amazon and Tesla. Learn the different ways to trade on, or invest in, the NASDAQ 100.
Start trading today. For account opening enquiries call 1800 601 799 between 9am and 6pm (AEDT) weekdays, or email newaccounts.au@ig.com.
Contact us: 1800 601 799
Start trading today. For account opening enquiries call 1800 601 799 between 9am and 6pm (AEDT) weekdays, or email newaccounts.au@ig.com.
Contact us: 1800 601 799
If you’d like to trade or invest in the NASDAQ 100, follow these three steps, or read our full guide below:
1. Decide whether you want to trade or invest
There are several ways to get exposure to the NASDAQ 100 – including trading or investing in ETFs and individual shares, or trading on the index’s value using our proprietary product, the US Tech 100.
2. Create a trading plan
Before taking a position on the NASDAQ 100, you'll need to decide whether you're a short- or long-term trader – and how you're going to manage your risk.
3. Open a live account
Then, open and fund any or both of the following accounts – CFD trading and share trading - and fill in our application form.
How can you trade or invest in the NASDAQ 100?
With us, there are a number of ways to gain exposure to the NASDAQ 100 (known on our platform as the US Tech 100) – so you can choose the one that suits you best.
You can:
Trade the NASDAQ 100 index directly
Trade the performance of USA’s largest domestic and international companies from a single position. Using our platform, you can trade our ‘US Tech 100’ – an exclusive product based on the performance of the NASDAQ 100. Trading on the index’s price is more liquid than trading it in other ways, and you can trade 24 hours a day, Monday to Friday.
You can trade the US Tech 100 on leverage using CFDs, without having to own any actual shares. Instead, you’ll put down a deposit to open a larger position, with profits and losses calculated on the full position size. This means your profits and losses can significantly outweigh your margin amount, so ensure you use risk management tools (like stop losses) when trading.
You can go long if you think the price will rise or short if you think the price will fall.
CFDs are commission-free when you trade our US Tech 100, as charges are in the spread.
Trade or invest in NASDAQ 100 ETFs
Gain broad exposure to the entire NASDAQ 100 by trading or investing in an ETF that tracks the price of the index. This means you won’t trade on the current price of the NASDAQ, but rather the ETF’s price, calculated on its net asset value (NAV).
Investing in NASDAQ ETFs is how many longer-term investors get exposure to the entire index. You can do this with share trading. Here, you’d buy upfront, based on the full value of the ETF, and hold until you want to sell.
With our share trading platform, you can buy and sell US shares like those on the NASDAQ at $0 commission per trade.1
You could also trade NASDAQ ETFs on leverage with CFDs, but bear in mind this offers lower liquidity and higher spreads than trading the index via our US Tech 100. Leveraged trades mean you can go long or short on NASDAQ ETFs. However, total profits or losses can significantly outweigh your margin amount, as both are based on the total position size.
| Trading the NASDAQ index via our US Tech 100 | Trading or investing in a NASDAQ ETF | Trading or investing in NASDAQ shares | |
| Account types | CFD trading account. | CFD trading account to trade or a share trading account to invest. | CFD trading account to trade or a share trading account to invest. |
| Market hours | 24 hours a day Monday to Friday and until 7am Saturday (AEST). | When the New York Stock Exchange is open – 11.30pm to 6am Monday to Thursday and 11.30pm Friday to 6am Saturday. Markets for all sessions stocks are available from 6pm to 10am Monday to Thursday and 6pm to 7am Saturday. Markets for all sessions share trading are available from 9pm to 7.30am Monday to Thursday, and 9pm Friday to 7am Saturday. If Australian-listed, when the ASX is open - 10am to 4pm, Monday to Friday. All times listed are in AEST |
When the NASDAQ 100 is open in the US – 11.30pm to 6am Monday to Thursday and 11.30pm Friday to 6am Saturday. Markets for all sessions stocks are available from 6pm to 10am Monday to Thursday and 6pm to 7am Saturday. Markets for all sessions share trading are available from 9pm to 7.30am Monday to Thursday, and 9pm Friday to 7am Saturday. All times listed are in AEST |
| Timeframe | Short to medium term. | Short to medium term for trading and long term for investing. | Short to medium term for trading and long term for investing. |
| Liquidity and execution | 0.0014 second execution speed and unique deep liquidity. | Higher liquidity offered by trading the index directly. | Higher liquidity offered by trading the index directly. |
| Costs | Commission-free. Trading the US Tech 100 on the spot (cash) incurs overnight fees, but index futures don’t incur these fees. |
Invest in US-listed ETFs from $0 commission per trade.1 CFD cash (spot) ETF trades incur overnight fees and have a minimum commission of $15. | Invest in US-listed shares from $0 commission per trade.1 CFD cash (spot) trading incurs overnight fees and have a minimum commission of $15. |
How to start trading or investing in the NASDAQ
If you’re ready to start trading or investing in the NASDAQ 100, follow these four steps:
Create your NASDAQ account
You can open any one of the following NASDAQ account types:
With us, you can open and fund both types of accounts to begin trading or investing.
Open your first NASDAQ trading or investing position
How you’ll go about this depends on the type of account you’ve chosen to open:
Trading CFDs on the NASDAQ 100
When trading contracts for difference (CFDs), you’re entering into a contract to speculate on either our US Tech 100 prices or the share prices of companies listed on the exchange. The amount the price of what you’re trading rises or falls (so, the difference between the price when you open versus when you close your position) determines your profit or loss.
Trading CFDs on the US Tech 100: cash indices
One way to trade the US Tech 100 using CFDs is on the spot (cash) price.
Trading the spot price means you get the closer pricing to the real time NASDAQ 100 than you would with futures, as prices are based off our future’s price with a fair value adjustment to get as close to the real time cash price as possible, plus low spreads and no commission on indices.
As spot trading does come with overnight funding fees if you leave a position open overnight, this form of trading is best suited to short- and medium-term strategies.
To open a US Tech 100 spot position:
- Select the US Tech 100 under ‘Indices’
- Choose the ‘Cash’ option
- Decide whether you want to buy (go long) or sell (go short)
- Choose your deal size in terms of number of contracts
- Set yours stops and limits
- Click ‘place deal’ to open your position
Trading CFDs on NASDAQ 100: options
With options you have the right, but not the obligation, to exercise the contract on or before its expiry date. When you trade options via CFDs, you’ll pay an initial deposit (called premium) to open a larger position. You’ll then speculate on the option’s premium for a profit or loss – but note that when selling an option, losses can significantly outweigh your deposit amount.
Remember, buying options is limited risk as you’ll only risk as much as your margin paid, but selling options is technically unlimited risk, as there’s no restriction to how much a market’s price can rise.
To open a CFD options position on the NASDAQ 100:
- Go to the CFD trading platform
- Click on ‘Options’ instead of ‘Indices’
- Choose ‘Indices’ as your asset class and select the US Tech 100
- Decide on your preferred maturity date range – daily, weekly or monthly
- Select a call or put option, and whether you want to buy (go long) or sell (go short)
- Choose the size of your position
- Set yours stops and limits
- Click ‘place deal’ to open the position
Trading CFDs on our US Tech 100: index futures
When you trade futures with us, you won’t pay additional overnight funding charges or commission, as the cost is built into the spread. This is why futures have wider spreads than spot positions.
Trading index futures via CFDs means you’re agreeing to trade our US Tech 100 at a specific price on a specific date in the future. To open a futures position:
- Go to the CFD trading platform
- Select the US Tech 100 under ‘Indices’
- Choose ‘Futures’ instead of ‘Cash’ to trade and select your preferred date range
- Decide whether you want to buy (go long) or sell (go short)
- Choose your deal size in terms of number of contracts
- Set yours stops and limits
- Click ‘place deal’ to open your position
Trading CFDs on NASDAQ 100: ETFs
If you want to gain exposure to a broad range of NASDAQ 100 shares all in one place, you can trade ETFs. Exchange traded funds (ETFs) are investment instruments that track the performance of a range of NASDAQ stocks, to give you variety with very low commissions.
ETF commissions start from just 2 cents per share on each side of every CFD trade, with a minimum fee of $15 for online orders. Just bear in mind that you’ll be trading on the cash (spot) price with ETFs, so there are funding charges you could incur if you leave your position open overnight.
To open a NASDAQ 100 ETF position:
- Go to the CFD trading platform
- Select ‘ETFs’ instead of ‘Indices’
- Click on your chosen ETF, for example the iShares NASDAQ 100 UCITS
- Decide whether you want to buy (go long) or sell (go short)
- Choose your deal size in terms of number of contracts
- Set yours stops and limits
- Click ‘place deal’ to open your position
Trading CFDs on NASDAQ 100: shares
For those who don’t want broad exposure, but rather have their eye on a particular NASDAQ-listed company, try CFD share trading.
With CFD share trading, you won’t own company shares outright. Unlike owning company shares, which means you can only make a profit if the share price goes up, you can go long or short.
While owning shares means paying the full share price upfront, CFD trading is leveraged. This means you’ll pay only a small deposit amount (called margin) to open a larger position.
However, as profits and losses will be calculated based on your total position size, these can substantially outweigh your margin amount, so ensure you always trade within your means.
CFD share trading on US shares has a minimum online charge of $15.2
To open a shares position, simply go to the CFD trading platform and:
- Select ‘Shares’ instead of ‘Indices’ or ‘ETFs’
- Click on your chosen company, for example Tesla
- Choose whether you want to trade shares on the spot or using futures
- Decide whether you want to buy (go long) or sell (go short)
- Choose your deal size in terms of number of contracts
- Set yours stops and limits
- Click ‘place deal’ to open your position
Investing in the NASDAQ with share trading
Buying NASDAQ ETFs with share trading
If as an investor you want to gain exposure to the whole NASDAQ 100 index, rather than just one stock, try buying NASDAQ ETFs.
Because this is a form of investing, NASDAQ ETFs are best suited to long-term or medium-term positions or a ‘buy and hold’ strategy.
Just like with ETFs, investing in US shares means you can pay zero commission per trade.1
Buying NASDAQ shares with share trading
If you’re interested in specific NASDAQ 100 company stocks rather than a broad-range ETF, you can buy shares on our share trading platform.
This means you won’t get exposure to the entire NASDAQ 100 index, but does mean that you can choose the stocks most closely aligned to your individual trading strategy.
Hone your NASDAQ trading strategies
Once you understand what moves the NASDAQ 100 and have created your trading or investing account and are ready to open positions, it’s time to perfect your NASDAQ 100 trading or investing strategy.
Here are six things you can do to up your game on the NASDAQ 100:
- Find the best trading style for you: do you want to buy and hold over the long term? Or rather trade specific market events in the space of hours and minutes, not days? Understanding whether you are a short term, medium term or long term trader will determine your best trading strategy. Some of these are scalping, day trading, swing trading and position trading
- Use technical analysis and indicators: trading or investing to cash in on market sentiment and trends is the key to profits, but how do you spot them? Trading indicators and technical analysis are vital, as they can help to identify tell-tale signals and trends within the market, so you can strategise accordingly
- Look for trading signals: another thing that can help you determine current trends are trading signals with momentum indicators such as the stochastic oscillator or relative strength index (RSI)
- Study charts and price action: studying price charts and price action, both recent and older, can help you recognise patterns to determine current market sentiment and help you spot lucrative trends to trade when they appear
- Set trading alerts: of course, no one can watch the market all the time, which is why we give our clients access to trading alerts. Input your chosen alerts when opening a position and you’ll be notified once your alerts are triggered by email, SMS or push notification
- Follow industry news: significant macroeconomic news will affect the NASDAQ index price, as will company and sector news that affect share prices. So, it’s a good idea to keep an eye on breaking news. To help you, we have a current news feed on the trading platform that is updated in real time, as well as our news and trade ideas page of articles analysing the latest, most relevant market news
Discover what else you need to know about the NASDAQ
There are still many things to learn about an index as well-traded as the NASDAQ 100. Here are just a few more answers to common questions:
What are the NASDAQ’s trading hours?
The NASDAQ’s normal market hours are 9.30am to 4pm EST (Eastern Standard Time), which is 11.30pm to 6am (AEST). Bear in mind, though, that this will change in winter due to daylight savings. However with us, you can trade 24 hours a day, from Monday to Friday, to best take advantage of significant market events that may not keep office hours, like earnings season.
How is the NASDAQ price calculated?
The NASDAQ price is determined by a host of factors, most importantly its constituent companies’ latest share prices. The constituent companies of the NASDAQ are the 100 largest non-financial companies (for example, not banks) on the NASDAQ stock exchange by market capitalisation. This, plus other factors, are calculated into an average value for the stock exchange as a whole.
The NASDAQ is a modified capitalisation-weighted index. This means that not all NASDAQ stocks have equal weighting but, rather, the largest stocks will contribute a higher percentage to the total aggregate. So, if Apple’s share price goes up significantly and Apple is one of the largest stocks by market cap on the NASDAQ, the NASDAQ price will almost definitely go up too.
FAQs
What are the ways you can trade or invest in the NASDAQ?
There are a few ways you can trade or invest in the NASDAQ 100 with us. Firstly, you can open a CFD trading account and trade on the NASDAQ 100 via our exclusive US Tech 100. Alternatively, you can use CFDs to trade on NASDAQ 100-listed stocks or a NASDAQ ETF. You can also trade the NASDAQ via options or futures.
If you’d prefer to invest, you can open a share trading account with us and buy NASDAQ 100 companies’ stocks outright or invest in a NASDAQ-tracking ETF.
What are the stocks on the NASDAQ 100?
The NASDAQ 100 is comprised of the 100 biggest companies (or 102 biggest securities, if you want to get technical) trading on the NASDAQ stock exchange in the United States. These include household names like Google’s Alphabet Inc, Apple, Facebook, Microsoft, Amazon and Tesla.
How do companies join the NASDAQ 100?
Companies come onto the NASDAQ 100 automatically. This is because the NASDAQ 100 is a capitalisation-weighted index. This means that, if a company is listed exclusively on the NASDAQ, it is weighed by size (market cap) and the 100 biggest companies by market cap on the NASDAQ exchange are included in the NASDAQ 100 automatically.
Each year, the NASDAQ 100 index is reranked in this way. So, all a company needs to do to ‘join’ the NASDAQ 100 list is be of the 100 biggest companies listed on the exchange in that year.
Note that they must be non-financial companies, as insurers, banks and other financial firms are instead included on the separate NASDAQ Financial 100 index.
1 If US-listed, there is a minimum charge of 2c per share or $15 minimum (USD) if converted manually from AUD to USD or 0.7% fx conversion fee for instant conversion. If Australian-listed, there is a standard rate of A$8 or 0.1% (whichever is higher) for 0-2 trades in the previous month. 3+ trades in the previous month = A$5 or 0.05%.
2 This is the rate for US CFD shares. Australian CFD Share Commission is 0.08% x 2 on both sides open close (minimum $7 x 2 charge). See our full list of share trading charges and fees.
