We lately talked about how the ecosystem has modified and expanded within the 40 years because the launch of the Nasdaq-100 (NDX®) index.
As we speak we’ll check out the place the ecosystem at present stands by way of property and liquidity.
Belongings of $1.4 trillion observe market capitalization of $31 trillion
The Nasdaq-100 Index® basically represents the 100 largest corporations (excluding financials) listed on the Nasdaq Inventory Market®, together with a lot of this century’s main innovators and eight of the world’s largest corporations.
These corporations have a mixed market capitalization of roughly $31.5 trillion.
The Nasdaq-100 Index makes use of the Trade Classification Benchmark (ICB) sector classification. The ICB classifies most of the corporations, equivalent to NVDA, AAPL, GOOG, and MSFT, within the Know-how sector, however notably, TSLA and AMZN are included within the Shopper Discretionary sector. Because the bubble on the high of Exhibit 1 exhibits, there are a lot of different giant corporations ($100 billion or extra) within the healthcare, industrials, client items, and supplies sectors, represented by 10 out of 11 corporations within the ICB sector.
Determine 1: 2025 common market measurement (notional worth) throughout international NDX merchandise and constituents ($s)
Sources: Nasdaq, CME, OCC, FactSet, Bloomberg, Morningstar, Structured Retail Merchandise. ETF and mutual fund sizes replicate property below administration which can be linked or benchmarked to NDX.ETF, and mutual fund sizes replicate common property below administration for all of 2025. Inventory measurement displays common market capitalization for all of 2025. The dimensions of structured notes and insurance coverage displays the overall capital invested in stay buying and selling as of December 31, 2025. The dimensions of the by-product displays the typical complete notional open curiosity in 2025. XND Flex and Trade Traded Choice sizes are acknowledged in billions rounded to 1 decimal place (“bn” or “B”), whereas all different items are acknowledged in billions rounded to the closest complete quantity or trillions rounded to 1 decimal place (“T”).
The underside half of Chart 1 exhibits property and portfolios tied to the Nasdaq 100. Add these to $1.4 trillion, roughly 50/50 cut up throughout exchange-traded funds (ETFs/mutual funds (on the left) and derivatives (on the best)).
A lot of the fund’s publicity is in ETFs ($587 billion). Collectively, the favored QQQ and QQQM account for almost 70% of the NDX benchmark ETF market capitalization. However there are dozens of different ETFs, a lot of which use Nasdaq-100 choices so as to add earnings or shield draw back threat, and several other that make the most of leverage to offer further upside or draw back beta. A good portion of ETFs may even be thought of actively managed.
The underside proper of Exhibit 1 exhibits a by-product product constructed across the Nasdaq 100 Index. Nasdaq 100 futures provide greater than $130 billion of publicity, and Nasdaq 100 exchange-traded choices provide almost $400 billion price of publicity on a notional foundation. Nevertheless, as talked about beforehand, most choices commerce at a delta of round 30%.
Alternatively, you may view these property as a “Delta One” vs. “Danger Oriented” investor resolution. Danger-oriented options embrace futures, choices, swaps, and leveraged/inverse/choices ETFs. Collectively, these account for about 59% of the property monitoring NDX.
Danger-oriented merchandise management $800 billion of liquidity per day
Now let’s check out how a lot cash is traded every day within the Nasdaq 100 ecosystem.
Throughout all NDX merchandise and constituents, common day by day notional worth trades in 2025 had been roughly $0.8 trillion. Solely about 30% of that liquidity comes from the 100 underlying corporations. Amongst them, retail giants Nvidia (NVDA) and Tesla (TSLA) had been probably the most influential, with the 2 corporations buying and selling greater than $30 billion in a mean day.
Chart 2: Common day by day greenback buying and selling quantity throughout listed NDX merchandise and constituents in 2025 ($)
Sources: Nasdaq, CME, OCC, FactSet, Bloomberg, Morningstar. All cumulative quantities in {dollars} from January 1, 2025 to December 31, 2025. All values are rounded to at the least two important digits, and three-digit values are rounded to the closest complete quantity. “bn” stands for billion and “T” stands for trillion. Part buying and selling volumes strictly replicate spot inventory buying and selling.
Somewhat, we see that risk-oriented merchandise dominate the day by day buying and selling quantity (liquidity). In truth, almost 98% of all commodity greenback buying and selling quantity comes from buying and selling E-mini futures, Micro E-Mini futures, NDX listed choices, and QQQ ETFs (Determine 2). And that liquidity is dominated by Nasdaq 100 futures and choices.
An space to spotlight is the enhancements made to Nasdaq PHLX (PHLX) Flex Index Choices buying and selling (the small darkish purple blob). This helps the continued progress of outlined final result merchandise equivalent to index-linked insurance coverage, structured notes and possibility overlay ETFs.
It is not stunning that this liquidity comes from hedging merchandise. Some time again I attempted to estimate who’s buying and selling US shares. The information then confirmed that liquidity suppliers, arbitrageurs and hedge funds added the majority of the inventory trades.
Importantly, low-cost and liquid hedges additionally assist keep market effectivity, permitting arbitrage to right even small value distortions.
As we speak’s Nasdaq 100
The Nasdaq 100 Index ecosystem has grown considerably as extra traders and merchants with totally different wants and return profiles are drawn to the businesses the index represents. As synthetic intelligence performs a bigger function in funding spending and seeks to revolutionize workflows, the liquidity and investability of the Nasdaq 100 Index is prone to help much more traders searching for entry to a twenty first century benchmark.
This research is an excerpt from a bigger report. Click on right here to view the entire white paper on the Nasdaq-100 Ecosystem.
