The New York Stock Exchange, or NYSE, is the world’s largest stock exchange by market capitalization. A stock exchange provides a location and means for buyers and sellers to trade stock in public companies. The New York Stock Exchange also collects and publicizes market information. The NYSE historically operated in continuous auction system via open outcry, where stock brokers shout out bids and offers in an attempt to make a trade. Electronic trading on the NYSE, where customers can place orders and have them executed by a computer maintained by the stock exchange, has become increasingly popular as a high-speed option over the traditional floor broker system.
The NYSE can trace its history to 1792 when a group of stock brokers signed an agreement to form a stock exchange. The first centralized location of the New York Stock Exchange was a rented room on Wall Street, later destroyed in the Great Fire of New York in 1835. The current name of New York Stock Exchange was adopted in 1863. The current iconic building housing the NYSE was opened in 1903.
The ability to trade on the New York Stock Exchange is restricted to owners of 1366 “seats” on the stock exchange. After becoming a public company itself, the NYSE sells one-year licenses to have direct access to trade on the stock exchange.
The New York Stock Exchange maintains strict requirements in order for a stock to be listed and traded on the stock exchange. The company must have a minimum of 2,200 shareholders and have an average daily trading value of at least 100,000 shares to make it worthwhile for the NYSE to list the company on its stock exchange. In general, the firm must have market capitalization of over $750 million, adhere to government regulations, and be reputable in order to trade on the New York Stock Exchange. Because of its long distinguished history, a majority of the largest and oldest companies in America are traded on the NYSE.
The New York Stock Exchange is not exclusively limited to stock of American-based public companies. Other types of traded securities include:
• Foreign Stocks
• Futures Contracts
• Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs)