NASDAQ introduced the world’s first fully electronic stock-market system in 1971.
The National Association of Securities Dealers Automated Quotations began operating on February 8, 1971. Unlike traditional exchanges such as the New York Stock Exchange, it had no physical trading floor; its early system displayed competing market makers’ bid and ask prices electronically on cathode-ray terminals.
There is an important technical nuance behind the usual trivia wording. NASDAQ initially functioned mainly as an automated quotation system, while actual trades were still arranged by telephone. Electronic execution was introduced later, in 1984. Even so, NASDAQ is conventionally credited as the first fully electronic stock market because it replaced floor-based quotation processes with a computerized network.
NASDAQ was created by the National Association of Securities Dealers, now associated with FINRA. It became especially identified with technology companies and later developed into a major exchange. Its name is an acronym for “National Association of Securities Dealers Automated Quotations.”