The New York Stock Exchange

The New York Stock Exchange is the largest stock exchange in the world in dollar volume and is ranked fourth for the most companies listed on the exchange. The New York Stock Exchange is the staple of Wall Street, and it has been in business since 1792. This makes it the oldest stock exchange in the United States and still operates as a prominent facet of American business.

How the NYSE Works

Unlike the NASDAQ marketplace, which is now entirely electronic, the New York Stock Exchange works just like it did many years ago with auction style bidding. Some electronic orders are processed by the NY Stock Exchange, which some estimates put as high as 50% of all shares that are traded. The rest of the buying and selling is done by broker-dealers who auction off large blocks of stock to floor traders at the exchange.

To trade stock on the New York Stock Exchange, you must have a seat on the exchange. Buying into the exchange is prohibitively expensive; many seats have been sold for upwards of $3 million just in the last few years. Generally, the price for seats rises with the stock market and falls as the stock market does. Having a seat on the exchange gives you direct access to the market with 1365 other people who come to a central place to buy and sell the worlds biggest corporations.

The Humble Roots of the Exchange

The largest stock market in the world started with a simple arrangement between 24 different shareholders of corporations. By signing the "Buttonwood Agreement," named after the place where stocks were previously traded and the tree under which the agreement was signed, the New York Stock Exchange was founded. The exchange started with just a few people trading portions of localized companies. Over time, the market has exploded to a point in which virtually every citizen in the United States and around the world is affected by the changing stock prices. The stock market has made it possible for everyone to make a profit in business, either in their own or riding the coattails of publicly traded companies.

Where will the NY Stock Exchange Move Next?

The history of the New York Stock Exchange is interesting to say the least. In the past 216 years, so much has changed on the floor of the exchange to open it up to all people, and make trading available from anywhere. The development of electronic trading has put the market in everyone's hands. Believe it or not, there was once a time when women were not allowed on the floor of the exchange; that ruling was reversed in 1943, but even still, the NY Stock Exchange has made huge leaps and bounds in just a few decades. The exchange has also grown in its total share of the world's trading; its merger with Euronext created the first transatlantic stock trading company, and in 2007, its merger with the American Stock Exchange put the NYSE at the top of the trading world.