The New York Stock Exchange (NYSE)
The biggest and most well-known exchange in the world is the New York Stock Exchange. The NYSE "Big Board" has been around for over 200 years ago and, until recently, was the only place major U.S. corporations were publicly traded. Among the “Fortune 500" companies listed with the NYSE are powerhouses like General Electric, Chase Manhattan, Citigroup, Coca-Cola, Frito Lay, and Wal-Mart and it is the most influential stock exchange on the globe.
Stock market investment happens face-to-face on the NYSE trading floor, although all processes are supported by computer networks. Orders arrive via brokerage firms and are passed to brokers for stock investment on the floor. The brokers then go to the ‘trading post’ for the stock where a specialist matches buyers with sellers. Stock prices are determined by auction and once a bid is accepted and the trade takes place details are then relayed back to the brokerage firm who notifies the investor of the transaction.
The other type of stock exchange is virtual, also known as the “over the counter" (OTC) market. The most prominent of virtual exchanges is known as the NASDAQ. Online stock investment is conducted via a network of computers and databases. All dealers on the NASDAQ conduct trading solely via a telecommunications network without any actual physical location.
The NASDAQ functions with the help of “Market Makers", brokerages that accept the risk of holding a set number of shares in a particular equity. This practice facilitates trading for that security. Money makers compete for customer orders by displaying price quotations, within a prescribed range, for a guaranteed number of shares. Money Makers then may match up buyers and sellers, but most frequently sell directly from their inventory. This process occurs via computer network and these online stock investments occur in seconds.
At one time only the NYSE traded in the major blue chip, Fortune 500 stocks, while the NASDAQ and other exchanges handled the stock investing transactions of second tier and small-cap stocks. The tremendous high-tech boom of the 1990’s changed all that. The NASDAQ is now home to such monster corporate entities as Intel, Microsoft, Cisco, and Dell and has become major competition for the New York Stock Exchange.
Other Stock Exchanges
The American Stock Exchange (AMEX) once held NASDAQ’s current position as the NYSE’s biggest rival. It is now the third largest exchange in the United States. The vast majority of trading on the AMEX now consists of small-cap stocks and derivatives (Futures, Options, and Swaps).
Penny stocks typically trade on the OTC Bulletin Board (OTCBB). Penny stocks, valued at $5.00 or less per share, are high risk stock investments with the potential for high returns in a short amount of time. A1stockpicks.com sister company, www.Affordablestock.com offers an exceptional hot penny stock picks plan.