1 / 20

Common Stock Markets

Common Stock Markets. NYSE vs. NASDAQ By Hilary Everist and Jessica Sandoval. NYSE. New York Stock Exchange. History. Created in 1792 by the Buttonwood Agreement Location gives Wall Street its prominent place in the financial industry

talisa
Télécharger la présentation

Common Stock Markets

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Common Stock Markets NYSE vs. NASDAQ By Hilary Everist and Jessica Sandoval

  2. NYSE New York Stock Exchange

  3. History • Created in 1792 by the Buttonwood Agreement • Location gives Wall Street its prominent place in the financial industry • Operates as a continuous auction market; buyers and sellers compete to complete a transaction at a price acceptable to each • Largest Exchange in regards to capital traded

  4. Member Firms • Direct trading on the floor- own one of the 1366 seats on the Exchange • Highest Price: 1929 for what would be $6 million today • Currently, prices are around $1 million • Member firms may complete transactions for their own account or as brokers for a commission • The Exchange governs its members, and customers’ orders take precedence

  5. Listing on NYSE • NYSE has 3,000 companies’ shares listed • Listing Requirements for Domestic Companies • Going Concern • Market Value of publicly held shares of $40 million • Total of 1.1 million common shares publicly held • Demonstrate Earning Power under Competitive Conditions • $2.5 million in most recent year and $2 million for each of the preceding two years • Aggregate of $6.5 million with most recent fiscal year’s being at least $4.5 million

  6. Specialist • Each common stock has one specialist • A specialist may be designated for more than one common stock • Helps bring buyers and sellers together to complete transactions at a fair price • Once an order is received • Immediately match ask and bid • Conduct an auction with market makers • Responsible for maintaining an orderly market • May represent customer orders or orders from his or her own account

  7. NASDAQ National Association of Securities Dealers Automated Quotation

  8. History • Founded by National Association of Securities Dealers (NASD) to provide more recognition for the over-the-counter securities market • Trade began February 8, 1971 with over 2,500 OTC securities • World’s first virtual trading floor • NASDAQ is an electronic stock market • Efficient, convenient and diversified market participants

  9. Timeline • 1994 NASDAQ made history and went beyond NYSE in annual share volume • 1998 NASD and the American Stock Exchange (AMEX) merged • AMEX: • Primary marketplace for US equities, options and derivative securities • Physical trading floor.

  10. Today… • Primary market for trading NASDAQ-listed stocks and on average lists more companies and trades more shares per day than any other U.S. market • Many new, high growth and volatile stocks • Therefore attracts many technology stocks and on the rise companies

  11. NASDAQ Structure • All updates are made through a computer and telecommunications system almost instantaneously • Price-Time Priority Model • Creates level playing field for all participants • Dealers’ market • Brokers are only permitted to buy and sell stocks directly through a market maker. • NASDAQ relays on several market makers • creates a more competitive price environment for each security

  12. Market Makers • Investment company that registers with the SEC to buy and sell a particular stock on the NASDAQ • Registered NASDAQ market makers and order-entry firms can become a NASDAQ market participant • Strict procedure and application to become a market maker followed by many rules and regulations • Fill orders for their company’s customers and for their own account • AKA Dealers to profit from the difference between the bid and ask price for the Stock. • A market maker will hold a certain number of stocks on his own books and must maintain two-sided markets during exchange hours. • Market makers are obligated to buy and sell at their displayed bid and ask prices • Market makers compete for the best price • Matches are completed with price preference first and then by the time they were posted.

  13. NASDAQ Process

  14. NASDAQ MarketSite • Times Square in New York City • Physical presence of NASDAQ • Seven story cylindrical tower with an exterior wall that is a LED electronic video display that provides current financial information • market quotes, financial news and advertisements 24 hours a day.

  15. NASDAQ • Successfully achieved economies of scale • It is the largest U.S. electronic stock market with approximately 3,900 listed companies globally. • The second largest exchange in the United States and the world’s largest and most liquid market for Exchange Traded Funds (ETF).

  16. NYSE vs. NASDAQ • NYSE • Physical Trading Floor • Specialist • Offers Price Improvement • Prestigious • “Largest” • NASDAQ • Virtual Trading Floor • Rely on market makers • Price as is • Listing fees and requirements • “Largest”

  17. Conclusion • We believe that NYSE and NASDAQ do not directly compete for they have each developed their own unique place in the financial market. • Both demonstrate sustainable growth by maintaining their core principles while adapting to advancements in technology.

More Related