THE HISTORY OF THE NYSE
The NYSE or the New York Stock Exchange is the US stock exchange which is located on Wall Street in New York in the US. The NYSE has a market cap which exceeds US$16 trillion which makes NYSE the world’s largest stock exchange which has an average of US$169 billion in daily trading value as of 2013.
Till 2014 the NYSE which is also called the “the Big Board” had a listing of more than 1900 companies out of which 1500 were American companies.
The New York Stock Exchange is the property of Intercontinental Exchange and its regulation is carried out by the Securities and Exchange Commission.
It was on 17th May 1792 when the New York Stock Exchange was founded when 24 stockbrokers signed the Buttonwood Agreement on Wall Street in New York City in the US.
In what has become the stuff of legend the 24 brokers met under a Buttonwood tree and created a centralized exchange for the rapidly increasing and the mushrooming securities market in America.
The need for auctioneers was eliminated who were used very frequently for tobacco, wheat, and other common commodities and they fixed a commission rate.
The NYSE made the Tontine Coffee House as its headquarters and initially focused on Government bonds.
After 25 long years on March 8, 1817, this organization became official and the New York Stock & Exchange Board was created which was later known as NYSE.
All during the initial years of the 1800s, the New York Stock Exchange started expanding beyond bank stocks and government bonds.
And as it happened New York became the new financial capital of America surpassing Philadelphia.
As the advances in telegraphic communication were created it enabled the buying and selling of stocks through the telegraph which created a new ease in trading and was a step towards expansion and modernization.
The membership to the NYSE increased monumentally and soon became more exclusive.
There was excitement in the air as by the start of the Civil War gold was discovered in California, and securities and commodities were starting to be traded on the NYSE.
There were many experiments with the location of the stock exchange but it finally settled in its present location at 11 Wall Street in the year 1865.
The Neo-Classical building became a Historic Landmark in 1978.
A new revelation began as in 1878, telephones were installed which gave investors access to brokers on the exchange floor.
As the activity increased the cap on the number of members was put at 1060 seats which also required purchase from members who were retiring.
The New York Stock Exchange struggled in the middle of international turmoil between the latter part of the 1800s and the end of World War 1 and then one day the stock market crashed on 23rd October 1929 which caused an almost 90 per cent drop in share prices.
This crash led to much heavy regulation by the American Government. And subsequently, the NYSE registered with the United States Securities and Exchange Commission.
The second crash came on 19 October 1987 when the Dow Jones Industrial Average dropped by 508 points and this was the biggest crash since 1929.
Today the technology used in the NYSE includes cell phones and super-fast computers and this has led to high-speed transactions and also has revolutionized the stock markets forever.
New York Stock Exchange Trading
Whenever a company registers with the New York Stock Exchange basically to raise capital, the shares of that particular company become available for public trading. All those traders who want to invest in the stock market can sell and buy stocks online with the help of exchange companies.
It is through the floor brokers and Designated Market Makers that the trading takes place on the trading floor.
To provide liquidity to each stock the NYSE assigns Designated Market Makers which is the only exchange that requires this assignment
There are opening and closing bells which are rung at the start and the finish of each trading day and the NYSE operates from Monday through Friday, from 9:30 am in the morning to 4:00 pm in the evening ET.
It has been a tradition of sorts since 1870, where market participants like CEO’s, Celebrities and other eminent personalities have been invited to ring the bell.
All the trading is automated with some exceptions of high priced stocks which makes the NYSE the leading hybrid market.
Manual trading takes about 9 seconds and trades execute within a second electronically. The trades also run constant auction format.
At present investors only need to find a brokerage who is an NYSE member and through him, they can buy and sell stocks and other products from the quotes which are provided to the brokerage from NYSE.
PRODUCTS PROVIDED BY NYSE
5 Regulated markets which include New York Stock Exchange, Arca, MKT and Amex Options are held by the NYSE.
Medium and large companies are listed on NYSE and smaller companies are listed on NYSE MKT.
Asset classes like equities, options, exchange-traded funds (NYSE Arca) and bonds (NYSE Bonds) can be traded on the NYSE.
There are many market indices housed by NYSE which include the S&P 500, the NYSE Composite, NYSE US 100 Index, the NASDAQ Composite, the Dow Jones Industrial Average, and others.
COMPANIES LISTED ON NYSE
RAISING US$55 billion in 2013 the NYSE is at present the world’s largest IPO provider.
Ticker symbols are used by the Companies listed on the NYSE, for example, Apple Inc is known as AAPL.
Around 20 per cent of the industries on NYSE are from financials—trusts, insurance, and others
Apart from this technology and telecommunications, consumer goods and services, healthcare, Oil, and gas are among other major industries covered by the NYSE.
Some major corporations listed on NYSE include Ford Motor Co, Bank of America, and General Electric Co, Apple Inc., Twitter Inc. and many more.