HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

New York Stock Exchange (NYSE): Defined & Explained


The New York Stock Exchange (NYSE) appeared 231 years ago, immediately changed the US market, and became the largest marketplace for buying and selling assets in the world. Nicknamed the BigBoard, it guides all market participants. Global traders monitor the NYSE on a daily basis as it affects subsequent European and Asian exchange operations. The global economic ups and downs of the last 100 years also begin in New York. In this article, you will find out how the NYSE evolved and why everyone is watching it now.

Origins And Timeline Of NYSE 

In order to avoid a repeat of the crash, the Securities and Exchange Commission (SEC) was created in 1934 as a powerful regulator. It approved mandatory registration of exchanges and brokers, full disclosure by listed companies, and no credit purchases of assets allowed. At present, almost 25 percent of Americans own shares in various companies. Thanks to measures taken, the work of the New York Stock Exchange was interrupted only several times by force majeure (the exchange was closed from the beginning of September to December 1914, but it did not stop working during World War II). 

How The NYSE Works

At the NYSE, some of the trades are done by people and some are done by computers. It is one of the last exchanges to use a hybrid model. There are 500 to 1,000 brokers on the NYSE trading floor every day. On the other stock exchanges, paper transactions have become fully automated.

The NYSE is usually open on weekdays and closed on Saturdays and Sundays and observes nine federal holidays every year: it is not open on those days.

How The NYSE Shapes The Dynamics Of Other Exchanges

Capitalized at $28 trillion, it is the largest trading floor in the world. The exchange calculates some of the major indices in the world - the S&P 500, the Dow Jones, and the NYSE Composite. They include the most expensive US companies and reflect the dynamics of the entire market. That is why they are called indicators of the country's economy. When people say "the US market is down," they usually mean the NYSE indices.

For example, if a crisis happens and the stock prices of all major companies drop, it will affect the value of the indices. Analysts and investors look at the S&P 500 or Dow Jones, understand what is happening in the market, and make investment forecasts.

Because of the time zone difference, the US indices are calculated first, so the NYSE not only shows the state of the US economy but also affects all the major stock markets of the planet. For example, if the Dow Jones falls, it will affect the indices of other countries.

NYSE Vs Nasdaq: What's The Difference?

The Nasdaq, founded in 1971, is the second-largest stock exchange in the United States after the NYSE, with a market capitalization of $19 trillion, $5.5 trillion less than the NYSE. Despite their similarities, there are several key differences between the two exchanges. The NYSE used to operate both an electronic trading system and an in-house trading system staffed by live specialists before the pandemic. In contrast, Nasdaq has been fully electronic since its inception.

The NYSE uses an auction market to set prices, with buyers and sellers bidding competitively at the same time, resulting in transactions when the buyer's bid and the seller's offer match. In comparison, the Nasdaq dealer market model sets all prices through dealers who continuously update bid (sell) and ask (buy) prices throughout the trading day.

Listing fees vary significantly between the two exchanges. Nasdaq's Capital Market's lowest level has listing fees ranging from $55,000 to $80,000, while NYSE's minimum listing fee is $150,000. Investors typically consider NYSE as an exchange for older, more established companies, while the Nasdaq focuses on newer companies, particularly those in technology and innovation, making a Nasdaq listing potentially riskier for some investors.

NYSE Indices

There are many groups of indices on the New York Stock Exchange, including those beginning with the NYSE - surprisingly, given the huge capitalization of the New York Stock Exchange, most of the indices are not popular. However, there are interesting but little-known variants - for example the index of brokers NYSE Arca Securities Broker/Dealer Index (XBD), composed of the largest investment and brokerage companies (Charles Schwab, Goldman Sachs, E*TRADE Group, etc.).

NYSE Composite

The best-known index in this series is the NYSE Composite, consisting of more than 3,700 stocks (at the moment). It contains all companies present on the exchange. It is clear that most of the companies constituting the index are American, and the index value measured in dollars is in fact the average value of all shares on the NYSE. Accordingly, if we multiply the index value by the number of all shares, we will receive the market capitalization of the stock exchange.

S&P 500

The S&P 500 Index (Standard and Poor's) includes the 500 richest companies and comprehensively evaluates the US economy. It is the most important US index. It includes stocks of 400 industrial, 20 transportation, 40 financial-economic, and 40 utility companies. The 1941 base value is 10 p., in 2023it is within 4,100 points.

Dow Jones Index

The Dow Jones Index is the oldest existing US market index. It was created by Charles Dow, to track the development of American stock markets. The index was first published on May 26, 1896. Originally, the index was calculated as an arithmetic average of the stock prices of the 12 largest companies. Now a scaled average is used to calculate the index in order to maintain comparability with changes in the internal structure of its constituent stocks.

At present, the Dow Jones index covers the 30 largest US companies. It is the simplest and most commonly used indicator of the US economy. The list of companies covered by the Dow Jones index is revised with the development of the stock market. The editors of The Wall Street Journal compile the list.

Conclusion

The NYSE is the largest stock exchange in the world, by a notable margin from second place. More than a quarter of the world's stock market capitalization is concentrated here. Because of its high liquidity, many traders prefer to trade on the NYSE, but for investors, the exchange is attractive due to its concentration of many low-cost exchange-traded funds with low spreads. It is this exchange and its assets that have the most reliable long-term data - you can find calculations on the behavior of US stock and bond prices since 1800, while for many other markets, this range is no longer than half a century.

#source


RELATED

Best Forex Expert Advisors for Profitable Trading in 2022

As many of you know, the foreign currency markets are open for trading 24/5, which makes it very hard for a human to keep track of everything that's going...

Top Tech Trends of the Future for Trading

Tech development impacts our daily lives as well as traders’ profits. Technologies change rapidly, creating new opportunities in everyday routine and the stock market...

Rules Followed by Professional Traders: How to Make Money Every Day?

How do professional traders spot great trading opportunities in the financial market almost every day? Which key traits separate experienced traders from beginners?

Earnings Season & Its Significance for the Stock Market

Earnings season for the first quarter of 2022 is upon us. Here’s what you need to know and what to expect from the markets during this period. Earnings season refers to the period...

All About Forex Day Trading

Day trading refers to the speculation on buying and selling a financial instrument within a single trading day and it is actually a very popular short-term trading strategy...

How to Get into Online Metal Trading?

The most popular precious metals in metals trading are gold and silver. The latter is strongly linked to the main currencies and the world economy as a whole. Precious metals...

USDT vs USDC: Which one is the Better Investment?

When you start trading crypto, you often hear the term “stablecoin.” Furthermore, you will learn that there is more than one out there, but the two biggest ones to consider will be USDT vs USDC...

Coronavirus pandemic: Three scenarios on the global markets

Markets require central banks to take regulatory responses, and after the chaos that occurred last week, the expectation of such measures was quickly taken...

Mastering the Weekly Time Frame in Forex Trading

The world of forex trading is replete with various time frames that traders can employ to gauge market direction and volatility. One of the most significant among these is the weekly time frame...

How to identify breakout stocks

As we all know, the price movement of any asset is determined by supply and demand. Demand and supply for an asset depend on many factors, which can be divided into three broad categories...

Chainlink: Is It on Track for a Bull Rally?

If you have recently watched the crypto charts, you can see the growing popularity of many coins, including Chainlink (LINK). And while so many assets are on the bull run...

What is spot trading in crypto and how does it work?

In a spot market, traders can immediately exchange their cryptocurrency for fiat currency or another cryptocurrency by placing a buy or sell order...

How to make money on meme stock?

Meme stocks are shares that gained popularity and achieved a cult-like following on social media. As a result, private investors in online communities can create hype and influence the price of individual shares...

Synthetic and Crypto Currency: What Are They, How to Create and Use Them

The set of trading tools that NordFX offers to its clients is a whole arsenal that allows a trader to apply the most effective strategies and win on the fields...

A Guide to Trading Metals

Precious metals such as gold and silver have been recognised as valuable metals for a long time, but gold and silver are not the only ones out there for investors

Telcoin: The Future of the Dark Horse of Cryptos

The cryptocurrency world famously has its ups and downs, and May 19 was not a good day. However, investors remain optimistic. Most cryptocurrencies already bounced...

The Intricacies of the Cryptocurrency KYC System

Cryptocurrencies, emerging as digital currencies secured with encryption, function on a decentralized peer-to-peer network and are recorded on distributed ledgers called blockchains...

What is a Pump-and-Dump Crypto?

A pump-and-dump scheme is a crime in which criminals accumulate a commodity or financial asset over time and artificially inflate the price by spreading...

Cyber Monday and the Stock Markets: Friends or Enemies?

The first Monday coming after Thanksgiving is called Cyber Monday and it is very similar to Black Friday only that the former mainly occurs online. Cyber Monday...

What Factors Affect the Price of Cryptocurrencies?

Do you want to trade cryptocurrencies but need to know when it is better to sell or buy them? What happens to the prices in the crypto market, and what should you consider?

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.