NASDAQ-100 definition

The NASDAQ-100 is a US stock index tracking the 100 largest non-financial companies listed on the Nasdaq stock exchange, weighted by a modified market-capitalisation method. It is heavily tilted towards technology and other growth sectors.

The index uses a modified weighting that caps how much any single company can dominate, which keeps the largest members from overwhelming the rest. Financial companies are excluded by design, so banks and insurers do not appear, and the line-up is reviewed on a set schedule.

Do not confuse the NASDAQ-100 with the Nasdaq exchange itself, which is the venue where the shares trade, or with the Nasdaq Composite, a much broader index covering almost all Nasdaq-listed stocks including financials. You can take exposure to the NASDAQ-100 through an index CFD, which tracks the index level without owning the underlying shares.

NASDAQ-100 Example

You expect US tech to rally, so you go long an index CFD that tracks the NASDAQ-100. Say the index is at 18,000.

The index advances to 18,200, a gain of 200 points. Your profit is the 200 points multiplied by the value per point of your contract.