stock were recorded manually and published daily. The so-called pink sheets were the means by which dealers communicated their interest in trading at various prices. This was a cumbersome and inefficient technique, and published quotes were a full day out of date. In 1971 the National Association of Securities Dealers Automated Quotation system, or Nasdaq, began to offer immediate information on a com- puter-linked system of bid and asked prices for stocks offered by various dealers. The bid price is that at which a dealer is willing to purchase a security; the asked price is that at which the dealer will sell a security. The system allows a dealer who receives a buy or sell order from an investor to examine all current quotes, contact the dealer with the best quote, and execute a trade. Securities of more than 6,000 firms are quoted on the system, which is now called the Nasdaq Stock Market. The Nasdaq market is divided into two sectors, the Nasdaq National Market System (comprising a bit more than 4,000 companies) and the Nasdaq SmallCap Market (com- prised of smaller companies). The National Market securities must meet more stringent listing requirements and trade in a more liquid market. Some of the more important initial listing requirements for each of these markets are presented in Table 3.4. For even smaller firms, Nasdaq maintains an electronic "OTC Bulletin Board," which is not part of the Nas- daq market but is simply a means for brokers and dealers to get and post current price quotes over a computer network. Finally, the smallest stocks continue to be listed on the pink sheets distributed through the National Association of Securities Dealers.     Table 3.4 Partial Requirements for Initial Listing on the Nasdaq Markets   Nasdaq National Nasdaq SmallCap Market Market   Tangible assets $6 million $4 million Shares in public hands 1.1 million 1 million Market value of shares $8 million $5 million Price of stock $5 $4 Pretax income $1 million $750,000 Shareholders 400 300   Source: www.nasdaq.com/about/NNMI.stm, August 2000. I. Introduction 3. How Securities Are Traded The McGraw−Hill Companies, 2001           CHAPTER 3 How Securities Are Traded 73     Nasdaq has three levels of subscribers. The highest, Level 3, is for firms dealing,