The Nasdaq Composite is a stock market index that consists of the stocks that are listed on the Nasdaq stock exchange. To be included in the index:A stock must be listed exclusively on the Nasdaq market.The stock must be a common stock of an individual company, so preferred stocks, exchange-traded funds (ETFs), and other types of securities are excluded.American depositary receipts (ADRs), real estate investment trusts (REITs), and shares of limited partnerships are eligible, however.That's why there are so many stocks included in the Nasdaq Composite and why the number of stocks in the index changes often. The index is designed to be representative of the entire Nasdaq stock market, not just the largest companies.