Insights

NYSE : Trading on the New York Stock Exchange

New York Stock Exchange also known as NYSE or the Big Board is the largest stock exchange in the world based on market capitalisation of its listed securities. Based in New York City, the NYSE is open for trading every weekday (Monday-Friday) between the hours of 9:30 am and 4:00 pm. NYSE provides a platform for buyers and sellers in the security market to trade on shares of stock in registered companies on the NYSE.

Traders who are usually stockbrokers execute stock transactions for their investors in a continuous auction cycle on the NYSE. The auctioneering on the NYSE platform was automated in 1995. Thus, enabling traders to perform transactions electronically in a wireless transmission system. The automation swiftly ended the NYSE’s 200 years use of paper transactions. And in so doing, brought a drastic change to the mode of trading.

Brief History of NYSE

The New York Stock Exchange was formed in 1792 with the signing of the Buttonwood Agreement. They had 24 pioneer stockbrokers in New York City as of then. Trading on NYSE were initially all government securities and also a few other private banks. It was officially registered as a national security exchange with the Securities and Exchange Commission (SEC) in 1934. As of 1997, they were records of about a billion shares trading daily on the NYSE platform. The NYSE was initially run privately but officially became a public organization in 2005 after acquiring Archipelago
stock exchange. Also in 2007, the NYSE merged with the European Exchange to become NYSE Euronext. However, the NYSE is now owned by Intercontinental Exchange in a deal worth over $11 billion in 2013.

New York Stock Exchange

Trading on the New York Stock Exchange

As already stated, the NYSE provides the platform for buyers and sellers to transact on securities. The New York Stock Exchange hours are 9.30am-4.00pm from Mondays-Fridays except on holidays. The Big Board is closed on weekends and for some holidays or in cases of catastrophic eventualities like the 9/11 attack where trading was closed for four days.

Trading on the NYSE floor involves a continuous process of auctioneering where stockbrokers are majorly the participants. Currently, all NYSE stocks trade electronically, and all transactions execute immediately. The government also regulates the NYSE through Securities and Exchange Commission (SEC) to check fraud and coordinate risk management.

The NYSE index was initially placed on a base value of 50 points to equal the yearly close of 1965 but was changed in 2003 to a new base value of 5,000 points which equals 2002 yearly close. Prices for a seat at the NYSE fluctuates depending on how well the market is doing, and seat owners receive bonuses both in cash and shares. The New York Stock Exchange licenses for floor trading costs $40,000, for bond trading the license costs $1,000. However, the licenses are non-resell-able but transferring is possible when the license-holder corporation changes ownership.

To learn more about the NYSE, insights into its trading options and its regulations follow the link to visit their website.

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