NewYork Stock Exchange

The US stock market includes the exchanges NYSE, NASDAQ, Amex, OTCBB and PinkSheets. The NewYork Stock Exchange (NYSE) is the biggest US stock exchange and one of the largest in the world. It's also called the Big Board or simply the Wall Street as it is located at 11 Wall Street in New York. The NYSE is only outmatched by the NASDAQ stock exchange in terms of the share volume but the NYSE is bigger in dollar volume and total market capitalization.

Today online stock trading happens on many different trading floors, virtual and real ones. The history of the NYSE goes back to 1792 where a handful brokers signed the Buttonwood Agreement under a buttonwood tree in the Wall Street. The Bank of New York became the first listed company. The NYSE got its first quote ticker 1867, the first telephones 1878 and its first automated quotation service 1953. The New York Stock Exchange had a daily share volume of 1 million in 1886. Today it's over 3 billion.

In the beginning only five securities traded 1792. Now more than 2600 national and international companies are listed on the Big Board which is open for trading from 9:30 AM to 4:00 PM every day. Listing requirements are high and must be continuously met to stay listed. The requirements include a minimum number of shareholders, net income, market value, frequent financial reporting and more. Each company has to pay fees annually to remain listed on the NYSE.

The way how orders are matched on the NewYork Stock Exchange is quite different to the other virtual exchanges like the NASDAQ. Only NYSE approved broker-dealer entities can trade on the NYSE. They are either brokers or specialists. The floor brokers represent public orders and buy and sell securities as an agent for their customers.

The specialist is the middleman between the brokers. There is a trading post for each company on the NYSE trading floor, a 52000 square feet area in five rooms. Each post is responsible for more than 100 stocks. There a so called specialist makes the market for the stock. Each stock is allocated to a specialist. The specialist acts as an auctioneer and is required to make a fair market and maintain a narrow spread. He is required to put his customers interests above his own. In this so called open outcry auction system he matches buys and sells orders of the brokers. Buyers and sellers can meet directly in a fair and open market at the best possible price that way.

The New York Stock Exchange can handle a share volume of up to 10 billion per day that way. The record day ways 3.1 billion shares on June 24, 2005. The NYSE has recently introduced the Hybrid Market, a new market model to combine the auction market with automated trading.

Recently the NYSE acquired the fully automated Archipelago Exchange. Both companies merged into the for-profit NYSE Group which went public in March 2006.