New York Stock Exchange (NYSE)

New York Stock Exchange (NYSE)

What is the New York Stock Exchange (NYSE)?

The New York Stock Exchange (NYSE) is a New York-based stock exchange that is considered to be the largest stock-based exchange in the world, based on the total market capitalization of its listed securities. Previously managed as a private organization, the NYSE became a public entity in 2005 following the acquisition of the electronic exchange platform Archipelago. In 2007, a merger with Euronext, the largest stock exchange in Europe, led to the creation of NYSE Euronext, which was then acquired by Intercontinental Exchange, the current parent company of the New York Stock Exchange.

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New York Stock Exchange (NYSE)

Key points to remember

  • The NYSE, which dates back to 1792, is the world’s largest stock exchange based on the total market capitalization of its listed securities.
  • Many of America’s oldest publicly traded companies are listed on the Big Board, the nickname for the NYSE.
  • The Intercontinental Exchange now owns the NYSE, after purchasing the exchange in 2020.

How the New York Stock Exchange Works

Located on Wall Street in New York, the NYSE – also known as the “Big Board” – is made up of 21 rooms which are used to facilitate trade. The main building, located at 18 Broad Street and 11 Wall Street, were both designated historic monuments in 1978. The NYSE is the world’s largest stock exchange by market capitalization, estimated at $ 28.5 trillion as of June 30 2020.

The NYSE has relied for many years solely on the floor, using the open outcry system. Many NYSE trades have moved to electronic systems, but floor traders are still used to set prices and trade high volume institutional transactions.

Currently, the NYSE is open for trading Monday to Friday from 9:30 a.m. to 4:00 p.m. ET. The stock exchange is closed on all federal holidays. When federal holidays fall on a Saturday, the NYSE is sometimes closed the previous Friday. When the federal holiday falls on a Sunday, the NYSE may be closed the following Monday.

NYSE bells open and close

The opening and closing bells of the stock market mark the start and end of the trading day. The opening bell rings at 9:30 am ET and at 4:00 pm ET, the closing bell rings – end of the day’s session. Each of the four main sections of the NYSE has bells that ring simultaneously when a button is pressed. But trading days did not start and always end with a bell – the original signal was actually a hammer. In the late 1800s, the NYSE changed the hammer to a gong. The bell became the official signal for the exchange in 1903 when the NYSE moved to 18 Broad Street.

Before 1995, the bells were ringed by those responsible for the exchange. But the NYSE began inviting company officials to ring the opening and closing bells regularly, which later became a daily occurrence. The directors come from listed companies, which sometimes coordinate their appearances with marketing events, such as the launch of a new product or innovation, or a merger or acquisition. Sometimes the bells are ringing by other public figures, including athletes and celebrities. Among the most notable figures are singer / actress Liza Minnelli, Olympic medalist Michael Phelps and Joe DiMaggio of the New York Yankees. In July 2020, United Nations Secretary Ban Ki-moon rang the closing bell to mark NYSE’s support for the United States Sustainable Scholarship Initiative.

History of the New York Stock Exchange

The New York Stock Exchange dates back to May 17, 1792. On that day, 24 New York City stockbrokers signed the Buttonwood Agreement at 68 Wall Street. The New York Stock Exchange started with five stocks, including three government bonds and two bank stocks.

Many of the oldest publicly traded companies are listed on the stock market as a result of NYSE’s lead as the leading US stock exchange. Con Edison is the longest-listed NYSE stock, dating back to 1824 as the New York Gas Light Company. In addition to US stocks, foreign companies can also list their shares on the NYSE if they adhere to certain rules of the Securities and Exchange Commission (SEC), called listing standards.

The New York Stock Exchange passed the 1 million share mark traded in one day in 1886. In 1987, 500 million shares were traded on the NYSE on a normal business day. In 1997, 1 billion shares were traded daily on the NYSE.

Despite the transition to electronic trading platforms, NYSE ground traders are still used to set prices and process high volume institutional transactions.

A series of mergers has given the New York Stock Exchange its massive size and global presence. The company started as NYSE before adding the American Stock Exchange and merging with Euronext. NYSE Euronext was bought under an $ 11 billion deal by the Intercontinental Exchange (ICE) in 2020. The following year, Euronext exited ICE via an IPO, but ICE retained ownership of NYSE.

Milestones in NYSE history

  • October 24, 1929: The most devastating market crash in US history started on Black Thursday and continued in panic on Tuesday October 29. It followed the crash of the London Stock Exchange which took place in September and marked the start. of the Great Depression, which affected all the industrialized countries of the West.
  • October 1, 1934: The NYSE is listed as a national securities exchange with the SEC.
  • October 19, 1987: The Dow Jones Industrial Average (DJIA) lost 508 points, a loss of 22.6% in a single day.
  • September 11, 2001: The exchanges were closed for four days at the NYSE after the September 11 attacks and resumed on September 17. About $ 1.4 trillion was lost in the five trading days after the reopening – the largest loss in NYSE history.
  • October 2008: NYSE Euronext is finalizing the acquisition of the American Stock Exchange for $ 260 million in shares.
  • May 6, 2020: The DJIA suffered its largest intraday drop since the crash of October 19, 1987. It lost 998 points, called Flash Crash 2020.
  • 2020: ICE has offered to buy NYSE Euronext as part of a $ 8 billion share swap.
  • May 1, 2020: The NYSE was fined $ 4.5 million by the SEC to settle charges of violating market rules.
  • May 25, 2020: Stacey Cunningham became the first woman president of the NYSE.

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