What Is The New York Stock Exchange?
The New York Stock Exchange is the largest stock exchange in the world by dollar volume, and the second largest by the way of number of companies listed for trading. The global capitalization of the New York Stock Exchange was twenty five trillion dollars at the end of the year 2006. The trading floor for the New York Stock Exchange is located at 11 Wall Street, and this location has become famous in movies about stock trading and the stock market. There are five rooms here where the trading occurs every day, and they are frantic with activity while the market is open to trading. 18 Wall Street was the main building that was used for trading stocks, but this building is now designated as a Natural Historical Landmark. The New York Stock Exchange utilizes an efficient method for sellers and buyers to trade shares of stock in companies that are traded on the public market.
This stock exchange allows for efficient price discovery by using an auction method which is designed to guarantee a fair price to both parties involved in the trade. Beginning January 24, 2007, all stocks on the New York Stock Exchange can be electronically traded. This means that there are two ways to trade on the stock exchange, by electronic ticket or on the floor in an auction enviroment. Each stock that is traded on the floor of the New York Stock Exchange has a specific location on the trading floor. Any exchange members that are interested in a trade concerning that stock will congregate in the location for that stock.
Trading shares directly on the exchange market is only allowed by owners of the seats on the exchange. There are 1366 seats on the exchange, and they are extremely desireable. The price of these seats can be quite expensive, sometimes going for two or three million dollars in times of rising stock prices. The most expensive price ever paid for a seat was in 1929, with an amount of $625,000, which today would be over six million dollars. There are now one year trading licenses also available from the New York Stock Exchange, which allows the owner of the certificate the right to trade directly on the exchange for a period of one year. The start of the New York Stock Exchange happened on May 17, 1792 when twenty four stockbrokers signed the Buttonwood agreement. Since these humble beginnings, the New York Stock Exchange has become one of the biggest stock exchanges in the world. Copyright © 2007 Joel Teo. All rights reserved.
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