It is a known fact that most of the stocks and shares are traded in a place called stock exchanges. This is the place where traders who deal in stocks and shares come together. Those who have visited any stock exchange such as NYSE would certainly have witnessed the bell which announces the opening of the trading session. This is a living example of a live exchange where there are real traders in stock trying their luck after the opening of the day’s trading. These are basically brick and mortar stock exchanges and additionally there are also many virtual stock exchanges where there is no floor space. They are generally made up of many computers that are networked with one another. Here the stocks are bought and sold electronically.
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It would be pertinent to have a closer look at how business is done in a stock exchange market. It could be compared to a business model of E-Bay where the buying and selling happens almost across the world sitting in the comfort of homes or internet parlours. It avoids the need for moving store to store for looking out for various items. All that you have to do is to log into the stock market and you can get into the job of finding buyers and sellers and transactions worth thousands and even millions of dollars can happen at the click of a button. [wp_ad_camp_1]
We will over the next few lines have a look at the various major stock exchanges in the country:
- The New York Stock Exchange is perhaps one of the famous and the oldest stock exchanges not only in the country but also across the world. It is better known as NYSE and is also called as the “Big Board”. In fact many huge transnational companies like McDonalds, Coca-Cola and Wal Mart would like to call the NYSE their home. This is a listed exchanged where a number of transactions are conducted on the trading floor. The whole process starts at a place called the brokerage firm. The transaction then moves to the broker on the floor. This person is also often referred to as the specialist and his job is to bring together sellers and buyers of a particular stock. When the actual sale takes place, the price is determined through an auction process. The highest price that is quoted by a buyer in such auction is the high of a particular share and the lowest price is considered the low of a particular share.
- The NASDAQ is one of the biggest virtual stock exchanges in the world and is often referred to as the OTC market. Since there is no physical location as far as NASDAQ is concerned, all the stock trading is done electronically with the help of a network of dealers. There are also no floor brokers as is the case with NYSE. The tech boom of the 1990s has made NASDAQ very popular and is giving a good run for money to NYSE. It is the home to many tech companies of repute such as Dell, Cisco, Intel, Microsoft and Oracle.
- The American Stock Exchange of AMEX as it is also known is the third biggest major US Stock exchange in USA. When it was created, it was done with the objective of being an alternative to NYSE. However, this role was taken over by NASDAQ and eventually AMEX was bought over by The National Association of Securities or NASD which is the parent company of NASDAQ. Only small cap stocks use this stock exchange as of now.
Lastly, when it comes to penny stocks, the one name that comes to many of our minds is Over The Counter Bulletin Board. It is the home to millions of buyers and sellers and also companies that do not feature in the list of NASDAQ or NYSE.