What Is the New York Stock Exchange and What Does It Do?
The New York Stock Exchange is located on Wall Street in New York City.
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What Is the New York Stock Exchange in Simple Terms?
With more than 2 billion shares trading hands each day, the New York Stock Exchange (NYSE) is the world’s largest exchange for securities trading, which is the buying and selling of debt or equity, such as stocks and bonds. The NYSE is located in a historic building in the heart of New York City’s financial district at 11 Wall Street.
The NYSE was known for centuries as the "Big Board" because brokers would use an auction-based system to buy or sell shares of stock from its trading floor, and share prices were updated throughout the day on a large board that traders could see from the trading pit.
A ringing bell signaled the beginning and the end of the trading day. The opening bell signaled the start of the trading day at 9:30 AM, and the closing bell happened at 4:00 PM, marking the end of the trading day. Trades at the NYSE took place on an actual trading floor up until the onset of the COVID-19 pandemic, when everything moved online; floor trading resumed for vaccinated brokers in May 2021.
Is the NYSE a Stock Exchange or a Stock Index?
The NYSE was a privately-owned exchange, or a place for trading, from its inception in the late 1700s until 2006, when it was bought by Intercontinental Exchange, which took shares public. Its ticker symbol is ICE.
However, since the New York Stock Exchange is the world’s largest trading exchange, with over 80% of the S&P 500 companies trading on it, the NYSE Composite, made up of 2,000 stocks listed on the NYSE, has come to be known as a benchmark stock market index. Glancing at how it’s doing gives investors a sense of the overall health of the financial markets. An exchange-traded fund (ETF) based on the NYSE Composite was introduced in 2004; its ticker symbol is NYA.
In addition, the New York Stock Exchange owns a smaller stock exchange, the American Stock Exchange, which it acquired in 2008. Now known as the NYSE American, it is where small-cap companies trade on lower volumes.
What Does the New York Stock Exchange Do? Who Works There? How Does It Make Money?
The NYSE has two purposes:
1. It facilitates buy-and-sell trades of securities.
2. It enables companies to raise capital by selling stock.
The NYSE was originally founded as a space exclusively for securities trading under the Buttonwood agreement in 1792. Prior to that, traders had to sell securities alongside commodities like coffee and tobacco and often had to do so outside, in rain and snow, which is how they got the nickname curbstone brokers.
The Buttonwood Agreement also established regulations and set standard commission fees that brokers could charge clients. Now, with a roof above their heads, traders could call out buy and sell orders from the trading floor; those transactions would be recorded, which provided a level of transparency as well as liquidity that before had not been possible. It was the beginning of efficient market operations as we know them.
Today, computers do most of the buying and selling at the NYSE, although there are still several hundred brokers and traders who shout their orders from the trading pit each day. The scene plays host to dozens of media outlets as well as executives and celebrities who ring the opening bell.
The NYSE makes money through revenues from transaction fees it charges to brokerages, asset-management companies, and market makers. In addition, all members of the NYSE are required to pay yearly membership fees as well as an additional fee to apply.
What Are the New York Stock Exchange’s Hours? Can I visit the NYSE?
The NYSE operates Monday–Friday from 9:30 AM–4:00 PM eastern time. It is closed in observance of the following holidays; when the holiday falls on a Saturday, it closes the Friday before.
- New Year’s Day
- Martin Luther King, Jr. Day
- Washington’s Birthday
- Good Friday
- Memorial Day
- Juneteenth
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
The NYSE was open for tours up until the September 11, 2001 attacks; it is no longer accessible to the public.
Which Companies Are Listed in the New York Stock Exchange? How Does a Company Get Listed?
The NYSE lists over 2,000 U.S. and international stocks—for the current lineup, check the directory on its website.
What Is the Difference Between the NYSE and the Nasdaq?
The NYSE and the Nasdaq are both stock exchanges, but the NYSE is much larger. It has a market capitalization of $26 trillion as of 2021, compared with the Nasdaq, which has a market cap of $19 trillion.
In addition, there are several other key differences:
Differences between NYSE and Nasdaq Exchanges
| NYSE | Nasdaq |
|---|---|
Trading floor & electronic | Electronic only |
Founded in 1792 | Founded in 1971 |
Auction market | Dealer market |
The NYSE sets prices through an auction market, which means that shares are bought directly by buyers from sellers, and share prices are set based on the highest price a bidder is willing to pay and the lowest price a seller will accept.
The Nasdaq uses a dealer market, which means that buyers and sellers do not interact directly; rather, the trades are handled by a dealer, often a larger brokerage known as a market maker, which maintains inventories of stocks and facilitates trades from its own accounts.
Where Is the New York Stock Exchange at Right Now?
For a live feed of NYSE prices, check out its website.