New York Stock Exchange
Ranked as the largest in the world when it comes to equity-based exchange, the stock exchange which is based in the New York City, has total capitalization in the market in terms of its listed securities. The exchange keeps stock for 2800 companies, ranging from up-coming high growth companies to blue chips. The companies have to match up to the strict requirements for them to maintain the reputation of the NYSE. This article will expound on the stock exchange to provide a clear image of understanding.
The key players in NYSE are brokers and specialists. Brokers are people employed by investment firms to trade for the firm itself or the firm’s clients. The brokers strive to bring, buy and sell orders to the specialists. A specialist deals with one or more specific stocks depending on the trade volume. They manage the auction by accepting orders from the brokers. Another duty of a specialist is to ensure there is a market for the specific stocks at all times. This may involve investing capital from the firms to keep the market active and the shares liquidity. This two players maintain an effective system that enables investors to acquire competitive prices from supply and demand.
NYSE was formerly a private company but was made public in 2005 after acquisition of Archipelago, an electronic trading exchange. It is a child company of the NYSE Euronext due to a merger that was created in 2007 with the European Exchange. The NYSE relied on floor trading mostly. Thus earning a name, the Big Board. Introduction of Archipelago has led to half of the trades to be conducted electronically, although floor trading still exists to keep prices and deals in high volume for institutional trading.
The organization originated in 1792, hence, this is the major reason it is a home for majority of the world’s leading companies. Foreign companies adhere to rules known as the Securities and Exchange Commission. Working days are Monday to Friday, opening at 9.30 a.m. to 4.00 p.m. The market remains closed during nine holidays throughout the year. The company is located in 11th Wall Street consisting of a trading floor with four rooms. Wall Street is the largest money center in the US for international services and wholesale financial activities.
Presently, the chairman of NYSE is Marsh Carter, who succeeded John Reed and the CEO is Niederauer, succeeding John Thain. All the stocks from the exchange can be traded via an electronic hybrid market. This provides customers with the ability to send orders for instant execution in the auction market. The NYSE works with the SEC and CFTC, US stock regulators, to control risk management procedures in the electronic market through introduction of liquidity replenishment centers and circuit breakers. In 2005, the right to trade shares was directed to the owners of the seats. The term seats came from the 1870’s, where NYSE members sat in chairs to carry out trade.
Today, NYSE sells trade licenses durable for a year to trade directly on the stock exchange. However, the organization has faced a number of lawsuits regarding breach of duty and fraud. This proves that despite being the largest stock exchange it faces problems along the way. NYSE has opening and closing bells to indicate the commencement of the day and conclusion. Notable individuals have rang the bells such as Secretary-General Kofi Annan, Ban Ki-moon, rapper Snoop Dogg and many others. In conclusion, it is quite evident that NYSE plays a major role in the US and internationally in controlling investment and financial activities.