Financial Zip

If you want to trade in the financial markets you have to understand the markets that exist. Here are the 3 that are most well known: The NYSE, AMEX and the NASDAQ. These are actual physical places, except for the NASDAQ, that have traders that trade the stocks of the day.




NYSE

The New York Stock Exchange is located in New York City on Wall Street. It is probably one of the most famous streets in the world. It is one of the major financial centers in the world if not THE major financial center in the World. The New York Stock exchange was founded back in 1817, traders met under a button wood tree to trade the stock of the day. Wall Street got its name from the stockade wall that was used to defend the city from attackers.

It has now become the major trading center in the world. It has 2,764 companies listed on the exchange second only to the NASDAQ at 3200. But in terms of power and influence the NYSE is the center of the financial universe. The combined capitalization of all the companies on the stock exchange is around $25 trillion.

Companies will purchase a seat on the exchange for over a million dollars. Companies have certain requirements to meet in order to be traded they have to have more than a million publicly traded shares and must pay $250,000 - $500,000 annually to be listed on the exchange.

Trading occurs on the floor at what are called posts. These posts have multiple stocks that are being traded by a specialist. The stocks are sold at the highest bid and bought at lowest offer.








AMEX and NASDAQ

The AMEX is about as old as the NYSE, the companies that are traded on the AMEX generally tend to be smaller companies. The NASDAQ began in 1971 with the rise of computers. It was the first electronic market place. So trading occurred electronically. It has made it easier in our day than any other to trade stock just from the push of a button.




Benefits of Being Traded on an Exchange

All securities in the US are highly regulated by the SEC the Securities and Exchange Commission. The benefit to investors is that these companies are regulated in such a way that the pricing and reporting of these stocks is very accurate and timely. As an investor you have high quality information at your finger tips in order to make informed decisions on stocks that you want to buy and sell, and by buying and selling you see the volume in stock rise which allows you the ability to get in and out of stocks faster. That can help make your stock easier to trade.

Understand these markets are the centralized areas where trading takes place. These are the centers of the financial world. So anytime you trade stock, buy or sell, it is being done so through one of these exchanges.

A Word about Stock Indexes

Most people get exchanges and indexes confused an index is a collection of stocks that measure certain aspects of the economy. Exchanges are the actual place where the stocks are traded. If you would like to read more about indexes you can read about indexes here.








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