The Nasdaq Stock Market (Nasdaq), one of the largest markets in the world for the trading of stocks. In 2001 more than 4,800 companies were listed on Nasdaq—more than on any of the other stock exchanges in the United States, including the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX). The majority of companies listed on Nasdaq are smaller or less established than most of those on the NYSE and AMEX. Nasdaq has become known as the home of new technology companies, particularly computer and computer-related businesses.
Trading on Nasdaq is initiated by stockbrokers acting on behalf of their clients. These brokers place orders with certain Nasdaq brokers, called market makers, who concentrate on trading specific stocks. The broker and the market maker negotiate to reach a price for the stock.New York Stock Exchange (NYSE), one of the largest markets in the world for trading stocks and bonds, based in New York City. In 2001 the NYSE listed—that is, traded—the stocks of about 3,000 companies, valued at about $17 trillion. Non-U.S. stocks play an increasingly important role on the NYSE. More than 400 non-U.S. companies were listed on the NYSE in 2001, more than triple the number five years ago. Trading at the NYSE is initiated by stockbrokers acting on behalf of their clients. These brokers place orders with certain members of the exchange called specialists, who concentrate on trading specific stocks. The broker and the specialist negotiate to arrive at a price for the stock. See also Stock Exchange.
The NYSE began in 1792, when a group of stock and bond brokers gathered in a park in downtown New York City and agreed to meet daily at that location to trade financial instruments, such as stocks and bonds. By 1794 the exchange had moved indoors to the Tontine Coffee House, on the corner of Wall and Water Streets. In 1817 the exchange moved closer to its present Wall Street location, drew up a formal constitution, and named itself the New York Stock and Exchange Board. As New York City became the financial center of the United States during the 19th century, the New York Stock and Exchange Board became one of the most important financial trading centers. By 1863, when it changed its name to the New York Stock Exchange, the exchange was trading the stocks and bonds of the major industrial and railroad corporations of the day. Today, the NYSE is often referred to as the big board because it lists more major corporations than any other exchange in the United States.
Unlike other stock exchanges, Nasdaq has no central location where trading takes place. Instead, its market makers are located all over the country and make trades by telephone and via the Internet. Because brokers and market makers trade stocks directly instead of on the floor of a stock exchange, Nasdaq is called an over-the-counter market. The term over-the-counter refers to the direct nature of the trading, as in a store where goods are handed over a counter.
The National Association of Securities Dealers started the National Association of Securities Dealers Automated Quotation (NASDAQ) system in 1971 to organize the over-the-counter market. Until then the over-the-counter market had few regulations, and traders often took unfair advantage of individual investors. In 1990 the Association formally changed the NASDAQ’s name to The Nasdaq Stock Market. In 1998 the National Association of Securities Dealers, the organization that manages the Nasdaq, merged operations with the American Stock Exchange to form the Nasdaq-AMEX Market Group. The new management organization maintains Nasdaq and AMEX as separate stock exchanges.
Trading on Nasdaq is initiated by stockbrokers acting on behalf of their clients. These brokers place orders with certain Nasdaq brokers, called market makers, who concentrate on trading specific stocks. The broker and the market maker negotiate to reach a price for the stock.New York Stock Exchange (NYSE), one of the largest markets in the world for trading stocks and bonds, based in New York City. In 2001 the NYSE listed—that is, traded—the stocks of about 3,000 companies, valued at about $17 trillion. Non-U.S. stocks play an increasingly important role on the NYSE. More than 400 non-U.S. companies were listed on the NYSE in 2001, more than triple the number five years ago. Trading at the NYSE is initiated by stockbrokers acting on behalf of their clients. These brokers place orders with certain members of the exchange called specialists, who concentrate on trading specific stocks. The broker and the specialist negotiate to arrive at a price for the stock. See also Stock Exchange.
The NYSE began in 1792, when a group of stock and bond brokers gathered in a park in downtown New York City and agreed to meet daily at that location to trade financial instruments, such as stocks and bonds. By 1794 the exchange had moved indoors to the Tontine Coffee House, on the corner of Wall and Water Streets. In 1817 the exchange moved closer to its present Wall Street location, drew up a formal constitution, and named itself the New York Stock and Exchange Board. As New York City became the financial center of the United States during the 19th century, the New York Stock and Exchange Board became one of the most important financial trading centers. By 1863, when it changed its name to the New York Stock Exchange, the exchange was trading the stocks and bonds of the major industrial and railroad corporations of the day. Today, the NYSE is often referred to as the big board because it lists more major corporations than any other exchange in the United States.
Unlike other stock exchanges, Nasdaq has no central location where trading takes place. Instead, its market makers are located all over the country and make trades by telephone and via the Internet. Because brokers and market makers trade stocks directly instead of on the floor of a stock exchange, Nasdaq is called an over-the-counter market. The term over-the-counter refers to the direct nature of the trading, as in a store where goods are handed over a counter.
The National Association of Securities Dealers started the National Association of Securities Dealers Automated Quotation (NASDAQ) system in 1971 to organize the over-the-counter market. Until then the over-the-counter market had few regulations, and traders often took unfair advantage of individual investors. In 1990 the Association formally changed the NASDAQ’s name to The Nasdaq Stock Market. In 1998 the National Association of Securities Dealers, the organization that manages the Nasdaq, merged operations with the American Stock Exchange to form the Nasdaq-AMEX Market Group. The new management organization maintains Nasdaq and AMEX as separate stock exchanges.
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