There are many different stock markets in the US. In most circumstances, the main markets that you will hear of are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the NASDAQ.
The markets are basically where people and companies trade securities. The market is the arena in which the players gather to trade.
The New York Stock Exchange has been around since 1792. It is located on Wall Street in New York City. The NYSE is the largest and best-known stock exchange in the country. It also has very stringent requirements for companies to join its listings. A company must be financially strong and show signs of being an industry leader to join the NYSE. Companies strive to belong to this market, and even pay annual fees for membership.
When a brokerage describes itself as a member of the NYSE it means that the firm has bought a seat on the floor of the NYSE. This means that there is actually a employee on the floor of the exchange buying and selling stock. This is an expensive investment for a firm, costing well over a million dollars.
The American Stock Exchange is similar to the NYSE in that it conducts its trading on a trading floor. The floor is filled with traders who buy and sell securities. The AMEX has been located in Manhattan since 1921. It is known as a major exchange for not only stocks, but also options. You will tend to find slightly riskier and smaller stocks listed on the AMEX, which operates under the NASDAQ-AMEX Market Group, a subsidiary of the National Association of Security Dealers.
NASDAQ, or the National Association of Securities Dealers Automated Quotations, is the youngest of the three major markets. It may also be the one you have heard the most about through the news. It lists just about every stock in the industry, but it is best known for listing technology companies. In fact, it is where you will find many major technology stocks, including Microsoft and Intel. It was launched in 1971 and was the first over-the-counter stock market. It links buyers and sellers via a computer network.
Brokers and dealers will market the stocks by maintaining an inventory in their own accounts. They will buy or sell when they receive an order from an investor. You will find that start up companies that are issuing stock in an initial public offering will often list on the NASDAQ.
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