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NYSE - New York Stock Exchange

The New York Stock Exchange (NYSE) is the largest and the oldest stock exchange in the United States. Located on Wall Street this exchange can be traced all the way back to 1792.  This exchange trades approximately 1.46 billion shares each day including stocks for some 2,800 companies as reported in the Wall Street News. To trade stock on this exchange means that your stock ranges from blue chip stocks to new high-growth companies. Each company traded on this exchange has to meet very strict requirements. This exchange is responsible for setting policy, listing securities, supervising member activities, overseeing the transfer of member seats, and evaluating applicants. The major players on the floor are stock brokers and specialists.

The NYSE uses an agency auction market system designed to allow the public to meet the public as much as possible. In fact, the majority of volume occurs with no intervention from the dealer. In the stock market game, the specialists mentioned above are responsible for ensuring that any imbalances of supply and demand are eliminated and are subject to fines and censures if they fail to perform their obligation. The brokers are employed either by investment firms (trading on behalf of the firm) or they trade on behalf of their clients. The brokers move around the floor of the NYSE and they bring “buy and sell” orders to the specialist. The stock brokers and the specialist work together to create and effective system that to provide those investing in the stock market, with competitive prices based on supply and demand in the open market.

In order to have the right to directly participate in stock trading on the NYSE means that you have to have a “seat” on the exchange. In 1868 the number of seat available was 533, but it has increased numerous times over the years. In 1953, the exchange stopped growing at 1366 seats available for directly trading stocks. Prices for these seats have varied over the years with prices ranging from 625,000 in 1929 to 4 million in the late 1990’s. This exchange now sells one-year licenses to trade directly on the exchange.

The NYSE is also known and is referred to as the “Big Board.” It is the largest stock exchange in the work by dollar volume and competes with the London Stock Exchange and the Tokyo Stock Exchange. The main building was made a National Historic landmark in 1978, located at 18 Broad Street between the corners of Wall Street and Exchange Place. It was established in 1792 as a result of the Buttonwood Agreement that was signed by 24 stock brokers outside of Wall Street. Unlike some of the newer exchanges, it still uses a larges trading floor to conduct its transactions. Other stock exchanges in the U.S. include the American Stock Exchange and the NASDAQ.

 

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