However, while they are both large American stock exchanges containing listings that are household names, they are also very different in how they work. The NYSE and Nasdaq have significant differences, including the size and number of listings, how trades are made, and also how they are perceived by investors. This is partly because the exchange has existed since
Whenever someone talks about the stock market as a place where equities are exchanged between buyers and sellers, the first thing that comes to mind is either the New York Stock Exchange NYSE or Nasdaqand there's no debate over why. These two exchanges account for the trading of a major portion of equities in North America and worldwide.
At the same time, however, the Nasdaq vs nyse and Nasdaq are very different in the way they operate and in the types of equities traded therein. Knowing these differences will help you better understand the function of a stock exchange and the mechanics behind the buying and selling of stocks.
Location, Location, Location The location of an exchange refers not so much to its street address but the "place" where its transactions take place. At both telecommunications centers, trading takes place directly between investors and their buyers or sellers, who are the market makers whose role we discuss below in the next sectionthrough an elaborate system of companies electronically connected to one another.
Auction Market The fundamental difference between the NYSE and Nasdaq is in the way securities on the exchanges are transacted between buyers and sellers.
The Nasdaq is a dealer's marketwherein market participants are not buying from and selling to one another directly but through a dealer, who, in the case of the Nasdaq, is a market maker. Traffic Control Each stock market has its own traffic control police officer.
The traffic controllers of both exchanges deal with specific traffic problems and, in turn, make it possible for their markets to work. On the Nasdaq, the traffic controller is known as the market maker, who, we already mentioned, transacts with buyers and sellers to keep the flow of trading going.
On the NYSE, the exchange traffic controller is known as the specialist, who is in charge of matching up buyers and sellers. The definitions of the role of the market maker and that of the specialist are technically different; a market maker creates a market for a security, whereas a specialist merely facilitates it.
However, the duty of both the market maker and specialist is to ensure smooth and orderly markets for clients. If too many orders get backed up, the traffic controllers of the exchanges will work to match the bidders with the askers to ensure the completion of as many orders as possible.
If there is nobody willing to buy or sell, the market makers of the Nasdaq and the specialists of the NYSE will try to see if they can find buyers and sellers and even buy and sell from their own inventories.
Perception and Cost of NYSE and Nasdaq One thing that we can't quantify but must acknowledge is the way that investors generally perceive the companies on each of these exchanges.
The Nasdaq is typically known as a high-tech market, attracting many of the firms dealing with the internet or electronics. Accordingly, the stocks on this exchange are considered to be more volatile and growth-oriented. On the other hand, the companies on NYSE are perceived to be less volatile.
Its listings include many of the blue-chip firms and industrials that were around before our parents, and its stocks are considered to be more stable and established.
Whether a stock trades on the Nasdaq or the NYSE is not necessarily a critical factor for investors when they are deciding on stocks to invest in. However, because both exchanges are perceived differently, the decision to list on a particular exchange is an important one for many companies.NASDAQ vs NYSE Stock markets are exchanges on which securities are traded among buyers and sellers.
Learn some of the important differences in the way the NYSE and Nasdaq exchanges operate and the securities that trade on them. Search for ticker symbols for Stocks, Mutual Funds, ETFs, Indices and Futures on Yahoo! Finance. The NYSE dates back to and is more prestigious. The Nasdaq was born in as a computerized trading system, while the NYSE, long relying on people to execute its trading, now uses both.
There are a number of stock markets that operate around the world, out of which the New York Stock Exchange (NYSE) and NASDAQ are two prominent stock markets in the United States. The NYSE dates back to and is more prestigious. The Nasdaq was born in as a computerized trading system, while the NYSE, long relying on people to execute its trading, now uses both.
The NYSE and Nasdaq have significant differences, including the size and number of listings, how trades are made, and also how they are perceived by investors.
Size and Number of Listings By the value of listed companies, the NYSE and Nasdaq are the two largest exchanges in the world. Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium.
Nasdaq vs. NYSE: Why Companies Choose One Over the Other The exchanges have distinct histories, though both claim a substantial share of shareholder's dreams. US Stock Market - all companies trading on American Stock Exchange,AMEX, NASDAQ, New York Stock Exhange, NYSE, OTC Bulletin Board, OTCBB.