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What is the New York Stock Exchange?

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  • Written By: Mary McMahon
  • Edited By: Bronwyn Harris
  • Last Modified Date: 26 November 2016
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The New York Stock Exchange (NYSE) is a facility where stocks and securities are bought and sold. It is the largest and oldest such exchange in the United States, and one of the major players in the world market as well. Events there shape the American economy, and also have an impact on American morale, as was clearly demonstrated by the “Black Thursday” crash of 1929, which played a major role in the Great Depression.

In 1792, the New York Stock Exchange was founded with the signing of the Buttonwood Agreement. After moving through several locations, the exchange settled into its home on 11 Wall Street in New York City. About 1,500 employees work for the organization, which is run as a non-profit corporation and managed by a board of directors. It lists securities available for sale or trade, oversees stock trades and sales, and sets policies within the stocks and securities industry.

Approximately 3,000 companies are listed with the New York Stock Exchange. In order to become a publicly listed company, a company must submit annual reports, offer stock for trade, and list an income above $2.5 million US Dollars (USD) before taxes. Once a company is listed, stock can be bought and sold on the exchange, either directly from company representatives who walk the floor or from other traders.

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Many stock exchange companies around the world have switched to an electronic format for buying and selling. The New York Stock Exchange takes a hybrid approach, offering both electronic trades and auctions on the trading floor. In order to work on the trading floor, brokers must buy a license, although until 2005, they were required to purchase one of only 1,366 seats in the exchange.

Along with other financial institutions, the New York Stock Exchange plays a major role in shaping American economy and financial policy. It aims to provide a safe and secure environment in which to trade, and often encourages additional regulation of the industry to ensure that investors continue to do business. Trading on the NYSE is not for the weak of heart, however. The trading floors are crowded and chaotic, filled with a wide range of sensory input including shouting traders, ticker screens detailing breaking news and stock prices, and a crush of humanity struggling to buy and sell.

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John57
Post 4

When I see any New York Stock Exchange photo of the traders on the floor, I wonder who would want that kind of job. I read once that stock brokers have an extremely high stress level, and if it is anything like I imagine, I can understand why.

Somehow they are able to make sense of the shouting and hand motions that are made as shares of stocks change hands. I can see how the adrenaline would run high, but think that would get old day after day.

I prefer to do my trading online and watch the markets that way. This is not quite as exciting as being on the floor of the New York Stock Exchange, but the stress level is much lower and I can still participate in what the market is doing.

myharley
Post 3

@Mykol - I was able to take a New York Stock Exchange tour when we were visiting New York many years ago. As far as I know, you are still able to do this, although security may be much tighter.

I found this to be very exciting and was just how I had pictured it in my mind. It is very busy and there are people running around and shouting on the floor.

I am fascinated with how the markets work, so I could have stayed and watched it for several hours. My husband was ready to go after about 10 minutes. At first glance, you wonder how anything gets accomplished.

The best way I can describe it is organized chaos. From an outsider it looks very chaotic and unorganized, but there is a lot of order that makes sense if you know what you are doing.

sunshined
Post 2

@Mykol - I don't think every seat has the same price, but I have heard that the seats can sell for thousands to millions of dollars. That is a pretty big range, but if you are a big investor, that probably wouldn't deter you.

I remember watching a video on the New York Stock exchange history and found it very interesting. Since this was the first, and is still the largest exchange in the United States, it really plays a big role in our financial markets.

I also had never thought about the fact that underdeveloped countries don't have a stock exchange. When you think about the strong, developing countries in the world, all of them have an active stock exchange.

Mykol
Post 1

I have seen many pictures of the stock exchange and often hear the New York Stock exchange closing bell on the news. I have always thought it would be really exciting to visit this in person.

Does anyone know if this is available for the general public to watch or do you have to own a seat on the exchange in order to watch the exchange operating in person?

I would also be curious to know how much it costs to purchase a seat on the exchange. I can only imagine this would cost an awful lot of money. This would be much more than the average person would be able to afford.

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