Whether from the countless Hollywood mentions and plots, or simply from its location in the Economic Heart of the country on 11 Wall Street in lower Manhattan, everyone in the world has heard of the New York Stock Exchange. In this short introduction we will provide you with the basics of what the New York Stock Exchange is, and what it actually does.
Let’s Start From the Beginning
New York Stock Exchange is the oldest stock exchange in the United States. Founded in May 17, 1792, this institution is 225 years old. Earliest securities traded on the NYSE were mainly governmental securities, few examples being War Bonds from the Revolutionary War and First Bank of the United States stock. First shares to ever be available for trade at the NYSE belonged to Bank of North America, First Bank of the United States, and the Bank of New York. NYSE’s origins trace back to 1792 when 24 stockbrokers signed the so-called “Buttonwood Agreement”.
So What Does NYSE Do?
The NYSE is the place where stocks, bonds, mutual funds, exchange-traded funds (EFTs) and derivatives are all traded. Along with these, the Exchange also offers electronic trading products, historical trading information, and order-execution products.
The NYSE is an auction market where brokers and specialists buy and sell securities for investors, trying to match up the highest bidding price with the lowest selling price. This is one quality that sets the NYSE apart, unlike NASDAQ and other electronic exchanges; the NYSE has an actual trading floor. Stocks, bonds, warrants, options and rights are traded at 22 horseshoe-shaped installations, also known as trading posts, right on the floor of the exchange on 11 Wall Street in NY. NYSE is open for trading Monday through Friday, between 9:30 a.m. – 4:00 p.m. US Eastern Time (ET), excluding holidays designated in advance by the Exchange. More than 1600 companies are listed on the NYSE, and the average monthly trading value is somewhere around $1.781 trillion. With the market capitalization of listed companies reaching about $21.377 trillion (Oct 2017), the NYSE is the world’s largest stock exchange.
Why do we need it?
The NYSE provides us with an orderly market for trading securities. For investors, if a company is listed in the NYSE it has earned a great seal of approval, due to the fact that NYSE is very strict and stringent in listing requirements. A company listed on the NYSE is believed to be more well-established than other companies listed on the NASDAQ or other exchanges, though like every other rule there are exemptions to this rule as well.
For many the NYSE is a representation of all that is Wall Street. It is the heart and soul of the American Dream where fortunes are made and lost. It is the greatest symbol of the free market, in its most tangible, true form. NYSE is as American as apple pie, so do your research find the company you want to invest your money in and grab your own slice of the American dream.