Jan 6, 2014

Stock Buy Break it Down - 2, The NYSE and NASDAQ Described, Plus Wild Baboons

Yesterday's stock post was a stampede of hits (9 clicks total), so figured it a good idea to bask in the glory and bake another.  This one covers the two major stock exchanges in the U.S.

When a corporation is birthed and issues stock, they select an exchange to be listed on:  either the New York Stock Exchange or NASDAQ.

NY Stock Exchange
The NY Stock Exchange (NYSE) goes way back, 1792.  Which is the same year Pigtails thinks I was born.  221 years ago, two dozen stockbrokers met beneath a shady Sycamore tree outside of 68 Wall Street to sign the Buttonwood Agreement.  Then they got busy trading.



The NYSE is nicknamed the Big Board, it's a beast and the largest exchange in the world.  $169 billion bucks are traded daily.  2,300 corporations are listed on it.  Mozy up to 11 Wall Street in NY City and you can touch it.  Or at least the fence out front.  New York readers, can folks get closer than this?



In the goldie oldie days, stocks were traded on the floor by loud mouthed auctioneers.  He/she/it would bring buyers and sellers together, shouting bids, plus little squares of paper scribbled with bid and ask prices flying everywhere, like New Year's confetti.  Try to imagine the energy in there on a busy day, bunch of belligerent suits screaming like angry apes:


~



Today, the exchange is less baboony.  Computers replaced human auctioneers, slips of paper swapped for keyboards.  There's still the opening bell formality, a freshly minted corporation rings the gong on their IPO day.



NASDAQ
NASDAQ is easier to roll off the tongue than National Ass of Securities Dealers Automated Quotations.  It's the newcomer on the exchange block, commencing in the 1970s.  It bloated quickly, now the second largest behind the NYSE.  It was the first exchange in the world to trade electronically.  Thriving on innovation, electro' automation and closer mesh between buyers and sellers, the NASDAQ early on listed mostly tech companies like Apple, IBM, Microsoft and Cisco.

Today, there's less focus on tech companies being listed exclusively on NASDAQ.  Facebook, Netflix and Amazon are there, but so is Starbucks, Mattel Toys, Bed Bath & Beyond and many other non techs.

What the Exchanges Mean to You
Not much, really.

As Jane Blow looking at buying stock, you don't really need to give a rat's behind whether a stock you're researching is listed on the NY Stock Exchange or NASDAQ.  There's little difference to us as traders.  The procedure to buy and sell is the same, so are the fees.  The differentiator is subtle and really in name only.

Amazon's on NASDAQ:

Bank of America's listed on the NY Stock Exchange:


Okay you half-dozen B&P readers, I'm out of time.  Pigtails wants help making a mustache duck tape iPod case.



Tomorrow we'll talk stock indexes.  You know, the Dow Jones, S&P 500, stock tickers and stuff.

-Beard

6 comments:

  1. Love these posts! I just started my own etrade account with my husband to start our long term investments. Keep going with these - I'm soaking it alllll in :) New York City reader too -- I'll see how close I can get to the stock exchange!

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  2. Anonymous1/07/2014

    I got on the floor. They wouldn't let me trade.

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  3. I know I said this would be fun for my daughter but this is going to help me too! I am going to open my own account as well. Keep these posts coming!

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  4. You used to be able to tour the stock exchange. I believe it was shut down after 9/11. The equally exciting Federal Reserve does still offer tours and I believe you can purchase shreds of decomissioned bills in the gift shop. I am going to stick to Times Square and Chinatown for excitement when I'm in NYC.
    http://gonyc.about.com/cs/attractions/p/nyse.htm

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  5. If you wanted to buy stocks from any publicly traded company, where would you go? You'd naturally go to one with a reputation for being the oldest and the largest, and that's located at 11 Wall Street in Manhattan.
    best penny stocks

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  6. This comment has been removed by the author.

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Thanks for the note, check back for my response!