Defining the NYSE (New York Stock Exchange)
The market capitalization of the listed businesses on the New York Stock Exchange (NYSE), the largest stock exchange in the world, totals a staggering $24.5 trillion. The NYSE trades more than nine million corporate stocks and securities each day.
The iconic physical trading floor of the exchange, located on Wall Street in New York City, is also where the NYSE's offices are. To be more precise, around $18.9 billion in shares of public company stock are traded daily on the NYSE, which serves as a central marketplace for buyers and sellers.
The exchange features a large number of the largest businesses in the world, with representation in industries like technology, healthcare, energy, financial services, and more. In actuality, the NYSE saw trading for 82% of the S&P 500 and Dow Jones Industrial Average.
The NYSE, which was formerly run as a private business, is now a publicly traded business owned by Intercontinental Exchange Inc. NYSE: ICE is the ticker symbol for it.
Understanding the NYSE
Equity shares of publicly traded corporations can be bought and sold on the NYSE. On a physical trading floor or an electronic platform, brokers bid on shares of stock under the NYSE's auction-based system for the highest price they can secure.
Selling brokers accept stock offers from brokers that represent purchasers, whether you are buying a few shares for your investment portfolio or a large financial institution is accumulating stock in a potential company. Prices are reported and updated often during the trading day as shares change hands.
Since its founding in 1792, the New York Stock Exchange has developed into a name that is nearly always associated with the whole U.S. stock market. The name "Wall Street" is frequently used to refer to the entire financial industry because the NYSE's offices are situated at the intersection of Broad and Wall Street in New York.
The NYSE provided both electronic trading and floor trading at its actual site in New York, New York, prior to the start of the Covid-19 epidemic. However, as a result of the pandemic, it stopped floor trading in March 2020 and switched to an entirely electronic system for all transactions. Physical trading was still not available on the NYSE as of the beginning of April 2021.
Requirements to be listed on the NYSE
A corporation must be publicly traded and adhere to stringent structural and financial requirements in order to be listed and traded on the NYSE.
A corporation must have at least 400 shareholders and 1.1 million outstanding shares in order to list on the NYSE. The market value of its publicly owned shares must be at least $40 million, or $100 million for transfers and certain other listings, and the share price must be at least $4.
The business must also be profitable, with earnings of at least $10 million over the previous three years. As an alternative, a business may keep its global market value at or above $200 million. For REITs, $60 million in shareholder stock is necessary.
Companies that wish to list on the NYSE must submit for inspection their financial records, corporate bylaws, and executive information. If a firm is accepted, it gets listed on the NYSE four to six weeks after approval.
Nasdaq vs. NYSE: What’s the difference?
The Nasdaq is the second largest stock exchange in the United States after the New York Stock Exchange (NYSE), with a stated market capitalization of $19 trillion, or roughly $5.5 trillion less than the NYSE. Founded only in 1971, the Nasdaq is a significantly more recent organization than the NYSE. Other significant distinctions between the two exchanges beyond age and market capitalization include:
Exchange Systems
The NYSE featured both an electronic trading system and a floor trading system prior to the pandemic, both of which were staffed by live specialists who assisted in facilitating the auctions that were taking place. Since its inception, the Nasdaq has only been an electronic exchange.
Market Types
While the Nasdaq employs a dealer market to determine prices, the NYSE uses an auction market. Buyers and sellers simultaneously submit competitive bids in the NYSE auction market. A transaction happens when a buyer's bid and a seller's ask are in agreement. All prices are set by dealers under Nasdaq's dealer market model. Throughout the trading day, dealers update the bid (sell) and ask (buy) prices regularly.
Listing Fees
The price to list on the major stock exchanges varies significantly. On the Nasdaq, listing costs for the lowest Capital Market tier range from $55,000 to $80,000. The lowest listing cost on the NYSE is $150,000, making it significantly more expensive.
Sectors
The NYSE is often thought of by investors as an exchange for more seasoned, more established businesses. Some investors view Nasdaq listings as riskier since the Nasdaq frequently features younger companies that are more focused on technology and innovation.
NYSE: Going back in time
On May 17, 1792, the New York Stock Exchange was founded. 24 New York City stockbrokers signed the Buttonwood Agreement on that day at 68 Wall St. Three government bonds and two bank stocks were among the five instruments that the New York Stock Exchange began trading with.
Many of the oldest publicly traded firms are on the NYSE because of its early dominance as the main U.S. stock market. As the New York Gas Light Company, Consolidated Edison (ED) joined the NYSE in 1824 and has been listed there ever since. If they follow specific listing requirements, foreign-based firms can list their shares on the NYSE alongside American corporations.
The New York Stock Exchange has acquired its enormous size and widespread prominence through a series of mergers. Before joining forces with Euronext and adding the American Stock Exchange, the business was originally known as NYSE.
The Intercontinental Exchange (ICE) acquired NYSE Euronext for $11 billion in 2013. The NYSE was still owned by ICE when Euronext split off from ICE the following year through an IPO.
Dates to remember in the NYSE’s history
- Oct. 24, 1929: On Black Thursday, the worst stock market crash in American history got underway, and it proceeded through a sell-off frenzy on Black Tuesday, Oct. 29. It came after the London Stock Exchange fall in September, which heralded the start of the Great Depression and hit all of the Western industrialized nations.
- Oct. 1, 1934: The NYSE registered with the SEC as a national securities exchange on October 1st, 1934.
- Oct. 19, 1987: The Dow Jones Industrial Average (DJIA) saw a loss of 508 points, or 22.6%, during the course of the day.
- Sept. 11, 2001: Following the 9/11 attacks, trading at the NYSE was suspended for four days before starting up again on Sept. The largest losses in NYSE history occurred in the five trading days that followed the reopening and totaled almost $1.4 trillion.
- October 2008: The American Stock Exchange was acquired by NYSE Euronext in October 2008 for $260 million in stock.
- May 6, 2010: The DJIA experienced its biggest intraday decline on May 6, 2010, since the crisis on October 19, 1987. In what is referred to be the 2010 Flash Crash, it lost 998 points.
- Dec. 20, 2012: ICE put forth an $8 billion stock swap offer to acquire NYSE Euronext.
- May 1, 2014: The Securities and Exchange Commission fined the NYSE $4.5 million on May 1, 2014, to resolve allegations of breaking market regulations.
- May 25, 2018: Stacey Cunningham was elected as the first female president of the NYSE.
- March 16, 2020: The DJIA experienced its greatest daily point decline in history as it dropped 2,997.10 points from the previous closing as COVID-19 pandemic worries began to spread. It was the third worst day ever in terms of percentages.
- March 23, 2020: The COVID-19 pandemic forced the NYSE to temporarily stop floor trading on March 23, 2020, instead choosing to carry on electronically.
- On March 24, 2020: The DJIA gained the most points in a single day due to hopes for a stimulus relief package. It was the fifth-best day ever in percentage terms.
Trading hours of the NYSE
The NYSE is open for business from 9:30 am to 4:00 pm ET, Monday through Friday. The NYSE is known for having "the bell" ring to start and end each trading day.
The following holidays and weekends are off-limits for trading at the NYSE:
- New Year's Day
- Martin Luther King, Jr. Day
- Presidents Day
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
Following the official close of trading on the NYSE, after-hours trading continues. The ability to conduct certain trades after the market has closed has been made possible by internet brokerage firms, which previously only allowed institutional investors access to the after-hours sessions.
FAQ
What is the oldest stock exchange?
The Dutch East India Company founded the Amsterdam Stock Exchange (AEX), which is located in the Netherlands, in 1602. Euronext now owns the Amsterdam Exchange.
What is the largest stock exchange?
In terms of the market capitalization of the firms listed there, the New York Stock Exchange (NYSE) continues to be the biggest stock exchange in the world. The Shanghai Stock Exchange came in second, followed by Euronext and the NASDAQ.
What is an NYSE slap?
An NYSE issuer must submit a Supplemental Listing Application (SLAP) and request NYSE approval before issuing more shares or carrying out certain other business changes. Listing Manager, the NYSE's fully integrated web application, allows users to electronically submit NYSE Supplemental Listing Applications.
What system does NYSE use?
Operating systems based on Linux are used by NYSE Group markets.
How do you get delisted from NYSE?
The delisting procedure was started on the New York Stock Exchange (NYSE) if a security's price closed below $1.00 for 30 straight trading days.