New York Stock Exchange - Explained
What is the New York Stock Exchange?
Written by J. Mance Gordon
Updated at April 22nd, 2024
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
What is the New York Stock Exchange?
The New York Stock Exchange is the oldest stock exchange in the United States located at 11 Wall Street, Lower Manhattan, New York City, New York. It was founded in 1792 and by far the largest stock exchange in the world based on the market capitalization of its listed companies and second largest in terms of the number of companies listed.
How Does the New York Stock Exchange Work?
The New York Stock Exchange is presently owned by the American company Intercontinental Exchange. The NYSE is also commonly known as the Big Board. The building located at 11 Wall Street consists of 21 rooms facilitating stock trade. The main building of the NYSE was located at 18 Broad Street. Both of these buildings were declared as the historical landmarks in 1978. There are about 2300 firms listed on the New York Stock Exchange including largest US and non-US companies with a total market capitalization of about 21 trillion. Since the 1990s, the daily share volume of the NYSE is less than that of NASDAQ, but its total market capitalization is 5 times more than NASDAQ.
For a long time, the NYSE only conducted floor trading using open outcry system. At present, although many companies have transitioned to the electronic system, the pricing is still set by the floor traders. They also deal in high volume institutional trading. The trading starts at 9.30 am ET with a ring of the opening bell and closes at 4.00 pm ET with a closing bell on all working days. Monday to Friday is considered to be the working days for the Exchange. The trading is closed on the federal holidays and if a federal holiday is on a Saturday the NYSE is sometimes closed on the preceding Friday and if it is a Sunday it may be closed on the following Monday. Several mergers and acquisition happened in the history of the New York Stock Exchange. In 2013, the Intercontinental Exchange purchased the NYSE with $11 billion. The NYSE was first conceived on May 17, 1792, by 24 stockbrokers from New York City. They signed the Buttonwood agreement at 68 wall street and the trading was started with five securities, including three government bonds and two bank stocks. The NYSE has faced various lawsuits regarding fraud and breach of duty throughout the history. On May 1, 2014, it was subjected to $4.5 million fine by the Securities and Exchange Commission for violating market rules.