The NYSE and Nasdaq: An Introductory Guide to How They Work

When most people think about the stock market, they think of Wall Street and the New York Stock Exchange (NYSE). The NYSE is one of the oldest and most well-known exchanges in the world. However, did you know that there is also a Nasdaq? In this blog post, we will discuss what the NYSE and Nasdaq คือ, how they work, and some of the differences between them.

KEY TAKEAWAYS

  • The New York Stock Exchange (NYSE), located in New York City, is the largest and most well-known stock exchange in the world.
  • The Nasdaq, located in New York City as well, is the second-largest stock exchange in the world behind the NYSE.
  • Today, the New York Stock Exchange is part of the Intercontinental Exchange (ICE), and Nasdaq is a publicly listed company known as Nasdaq, Inc.
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Nasdaq

Nasdaq is a global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. It is owned and operated by Nasdaq, Inc., which also owns the Nasdaq Nordic stock market network and several U.S. stock and options exchanges.

Nasdaq is headquartered in New York City, with offices around the world. The company’s technology powers more than 70 exchanges in 50 countries. Nasdaq was founded in 1971 as the world’s first electronic stock market.

Today, it is a leading provider of trading, exchange technology, information, and public company services. In addition to the Nasdaq Stock Market, the company’s businesses include Nasdaq Private Market, Nasdaq Capital Markets, Nasdaq Ventures, and Nasdaq Ventures Europe.

NYSE

The New York Stock Exchange, or NYSE, is a financial marketplace where stocks and other securities are traded. It is located on Wall Street in New York City, and it is the largest stock exchange in the United States. The NYSE is operated by a company called Intercontinental Exchange, or ICE. ICE also operates several other exchanges, including the London Stock Exchange and the Toronto Stock Exchange. The NYSE trades stocks for companies that are based in the United States and around the world. It is open Monday through Friday from 9:30 a.m. to 4:00 p.m. Eastern Time.

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Dealer vs. Auction Market

The NYSE is what is known as a dealer market, meaning that stocks are traded between broker-dealers and not directly between investors. In contrast, the Nasdaq is an auction market, where stocks are traded directly between investors.

Order Types

NYSE trades use what are called limit orders. A limit order is an order to buy or sell a stock at a specific price. For example, you might place a limit order to buy shares of XYZ Company at $50 per share. If the stock trades at $50 or less, your order will be executed. If the stock trades above $50 per share, your order will not be executed.

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Nasdaq trades use something called market orders. A market order is an order to buy or sell a stock at the best available price. For example, if you place a market order to buy shares of XYZ Company, your order will be executed at the current market price.

The NYSE also offers what is called stop orders. A stop order is an order to buy or sell a stock when it reaches a certain price. For example, you might place a stop order to buy shares of XYZ Company at $50 per share. If the stock trades at $50 or higher, your order will be executed. If the stock trades below $50 per share, your order will not be executed.

Market Maker vs. Designated Market Maker

The NYSE uses what are called market makers to trade stocks. Market makers are broker-dealers who are responsible for providing liquidity in the market by buying and selling stocks.

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Nasdaq uses what is called designated market makers, or DMMs. DMMs are also broker-dealers who provide liquidity in the market, but they do so by trading a specific set of securities that they have been assigned to by Nasdaq.

What is better?

There is no simple answer to this question. It depends on your investment goals and strategies. If you are a long-term investor, you might prefer the NYSE because it offers more stability. If you are a day trader, you might prefer the Nasdaq because it is more volatile.

Both the NYSE and Nasdaq offer investors a way to trade stocks and other securities. The NYSE is a dealer market, while the Nasdaq is an auction market. The NYSE uses limit orders, while the Nasdaq uses market orders. The NYSE has market makers, while the Nasdaq has designated market makers. Ultimately, it depends on your investment goals and strategies as to which exchange is better for you.

Founder of this enthusiastic tech blog and a lover of nature, space, future technology, and maybe, a nerd.

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