Difference Between NASDAQ and NYSE

Edited by Diffzy | Updated on: September 12, 2022

       

Difference Between NASDAQ and NYSE Difference Between NASDAQ and NYSE

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Introduction

NASDAQ stands for National Association of Securities Dealers Automated Quotations and NYSE stands for New York Stock Exchange. Nasdaq is an online global electronic marketplace for purchasing and selling securities. The New York Stock Exchange is a stock exchange is the largest equities-based exchange in the world based on the total market capitalization of its listed securities. We will summarize the differences between NASDAQ and NYSE in this article.

NASDAQ vs. NYSE

The full form of NASDAQ is the National Association of Securities Dealers Automated Quotations. On the other hand, NYSE stands for New York Stock Exchange. The NASD is the founder of the NASDAQ. On the other hand, the founders of NYSE are - Trowbridge & Livingston and B. Post. NASDAQ was founded in 1971. Whereas, NYSE was founded in 1871. NASDAQ is located on a floor of the MarketSite tower in New York City's Times Square. On the other hand, The NYSE is located on Wall Street in New York City. NASDAQ is a kind of dealer’s market. While NYSE is a kind of auction market. The NASDAQ exchange provides investors an approach to investing in much more volatile, possibly higher-growth securities than other exchanges that provide more stable, conventional companies. Contrastingly, the NYSE Exchange is provided for well-established companies. The stock ticker of NASDAQ is NASDAQ. Whereas, the stock ticker of NYSE is ICE. There are around 2,900 companies listed on NASDAQ. Whereas, there are around 1,860 listed on NYSE. NASDAQ is open for trading on weekdays from 9:30 am to 4:00 pm ET. A pre-market session is held from 7:00am to 9:30am and post-market session from 4:00pm to 8:00pm. Contrarily, the NYSE is open for merchandising Monday to Friday from 9:30 a.m. to 4:00 p.m. ET. The stock exchange is closed on certain U.S. holidays. When these fall on a Saturday, the NYSE is sometimes closed on the foregoing Friday. CEO of NASDAQ is Bob Greifeld. CEO of NYSE is Duncan L. Niederauer. For NASDAQ, the listing fee is $50,000 to $75,000. Whereas, the listing fee for NYSE is up to $250,000.

Differences Between NASDAQ and NYSE in Tabular Form

Table: NASDAQ vs. NYSE
Parameters of Comparisons
NASDAQ
NYSE
Year launched
1971
1817
Acronym for
National Association of Securities Dealers Automated Quotations
New York Stock Exchange
Market type
Dealer’s market
Auction market
Process of Trade Execution
Broker contacts market maker or uses an online form
Broker contacts specialist floor trader or enters it into Universal Trading Platform (UTP)
Total market cap of companies listed
$8.5 trillion (2014)
$16.6 trillion (2014)
Number of companies listed
Around 2,900
Around 1,860
Yearly or Annual Charges for listed companies
Around $27,500
The fees depends on the number of shares listed. It is, however, capped at $500,000.
Listing fee
$50,000 to $75,000
up to $250,000
CEO
Bob Greifeld
Duncan L. Niederauer
Perception
Exchange for high-tech stocks that are more growth-oriented and potentially more volatile.
Exchange for well-established companies, more stable stocks.
Trading schedule
Weekdays 9:30am to 4:00pm ET; a pre-market session 7:00am to 9:30am and post-market session from 4:00pm to 8:00pm
Weekdays 9:30 am to 4:00 pm ET
Public or private
Public
Held by publicly listed InterContinental Exchange (ICE), which also owns Euronext
Location
Trading is automated. Offices on a floor of the MarketSite tower in New York City's Times Square.
New York Stock Exchange building on Wall Street in New York City
Stock Ticker
NASDAQ
ICE

What Is Nasdaq?

Nasdaq is an online global electronic marketplace for purchasing and selling securities. It was an acronym for "National Association of Securities Dealers Automated Quotations". Nasdaq started as a supplementary of the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). Nasdaq was released after the Securities and Exchange Commission (SEC) urged NASD to systemize the market for securities not listed on an exchange. The outcome was the first electronic trading system. Nasdaq started for business on Feb. 8, 1971.

  • Nasdaq is the world's first electronic exchange.
  • It regulates 29 markets, one clearinghouse, and five central securities depositories in the United States and Europe.
  • Most of the world's technology giants are set down on the Nasdaq.

Understanding Nasdaq

The term “Nasdaq” is also used to symbolize the Nasdaq Composite, an index of more than 3,700 stocks listed on the Nasdaq exchange. It comprises technology giants Apple Inc. (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOG, GOOGL), Meta Platforms Inc. (META), Amazon.com Inc. (AMZN), and Tesla Inc. (TSLA).

Nasdaq officially detached from the NASD and began to regulate as a national securities exchange in 2006. In 2008, it merged with the Scandinavian exchanges group OMX to become the Nasdaq OMX Group. The company altered its name to Nasdaq Inc. (NDAQ) in 2015. Its headquarter is in New York. The Nasdaq administers 29 markets enabling the trading of stocks, derivatives, fixed income, and commodities in the U.S., Canada, Scandinavia, and the Baltics. The company also supervises a clearinghouse and five central securities depositories in the United States and Europe.100 exchanges in 50 countries uses its trading technology. Nasdaq Inc is set down on the Nasdaq stock market under the symbol NDAQ. This has been part of the S&P 500 Index since 2008.

Why the NASDAQ is important?

The NASDAQ exchange is important as it was the first exchange that provided investors the ability to trade stocks evidently through an automated system. Today, the NASDAQ’s automated trading has become mainstream among other exchanges. But the NASDAQ remains distinctive because of its center of attention on high-tech companies.

The NASDAQ is also significant because it’s comparatively easier for companies to list on this exchange than others, including the NYSE. Thus, more businesses become listed so investors can purchase and sell their shares.

Ultimately, the NASDAQ exchange provides investors an approach to investing in much more volatile, possibly higher-growth securities than other exchanges that provide more stable, conventional companies.

History of the NASDAQ

The NASD is the founder of the NASDAQ. The NASDAQ opened on Feb. 8, 1971. The world’s first electronic stock market started its journey by trading more than 2,500 over-the-counter securities. In that contemporary time, the NASDAQ was a computer bulletin board-type system. Firstly, no actual trading occurred between buyers and sellers.

1975: NASDAQ invents the modern Initial Public Offering (IPO) by setting down venture-capital-backed companies. This permits the underwriting syndicates to trade as market makers.

1985: NASDAQ generates the NASDAQ-100 Index.

1996: The first exchange website goes live: www.nasdaq.com.

1998: NASDAQ combines with the American Stock Exchange to form the NASDAQ-AMEX Market Group. AMEX was later obtained by NYSE Euronext in 2008 and its data was incorporated into the NYSE.

2000: NASDAQ members vote to reconstruct and offshoot NASDAQ into a publicly traded shareholder-owner for-profit company: NASDAQ Stock Market Inc.

2007: NASDAQ obtains OMX, a Swedish-Finnish financial company, and changes its name to NASDAQ OMX Group. NASDAQ OMX purchases the Boston Stock Exchange.

2008: NASDAQ OMX buys the Philadelphia Stock Exchange, the earliest stock exchange in the United States.

2009: NASDAQ OMX generates a mobile version of nasdaq.com, an industry first.

What Is the New York Stock Exchange (NYSE)?

The New York Stock Exchange (NYSE) is a stock exchange is the largest equities-based exchange in the world based on the total market capitalization of its listed securities. It is located in New York City. Previously run as a private firm. The NYSE became a public organization on March 8, 2006, by the acquisition of the electronic trading exchange Archipelago. In 2007, a union with Euronext—the largest stock exchange in Europe—resulted in the creation of NYSE Euronext. This was later obtained by Intercontinental Exchange, Inc. (ICE).

  • Most of the oldest publicly traded U.S. organizations are listed on the "Big Board," the byname for the NYSE.
  • Intercontinental Exchange now possesses the NYSE, having bought the exchange in 2013.

Understanding New York Stock Exchange (NYSE)

The NYSE is located on Wall Street in New York City. NYSE is also termed the "Big Board”. NYSE comprises one trading floor for equities and another for the NYSE American options exchange. The most important building is located at 18 Broad St. and the one at 11 Wall St. Both were denominated historical landmarks in 1978. The NYSE is the world's largest stock exchange by market capitalization, guesstimated to be $26.64 trillion as of August 2021.

The NYSE depended for many years on floor trading only, using the open outcry system. Many NYSE trades have transformed to electronic systems depending principally on designated market makers (DMMs) to perform both the physical and automated auctions. Quotes provided by DMMs are comparable with what floor traders and other market participants offer.

Recently, the NYSE is open for merchandising Monday to Friday from 9:30 a.m. to 4:00 p.m. ET. When these fall on a Saturday, the NYSE is sometimes closed on the foregoing Friday.

The root of the New York Stock Exchange can be tracked down to May 17, 1792. It was the time when the Buttonwood Agreement was signed by 24 stock brokers on Wall Street in New York City under a buttonwood tree. On March 8, 1817, the company outlined a constitution. The organization renamed itself the "New York Stock & Exchange Board."

In 1922, a building was constructed by the architectural practice of Trowbridge & Livingston. It was added at 11 Broad Street for offices, and a new trading floor named "the garage." Supplemental trading-floor space was added in 1969 and 1988 (the "blue room"), with the brand new technology for information display and communication. This was named the “blue room”. Another trading floor was constructed at 30 Broad Street in 2000.

With the advent of the hybrid market, through which a stock broker may either have his order executed instantly in a fully automated electronic exchange. Or have it routed to the trading floor where it is accomplished interactively via the more conventional live auction method in the presence of a specialist broker. A greater proportion of trading was executed automatedly and the NYSE determined to close the 30 Broad Street trading room in early 2006. In late 2007, the exchange shut down the rooms created by the 1969 and 1988 augmentations throughout the decreasing number of traders and employees on the floor. It occurred as a result of increased automated trading.

On June 2, 1978, the NYSE building was denominated a National Historic Landmark on the National Register of Historic Places.

Main differences between NASDAQ and NYSE in Points

The key differences between NASDAQ and NYSE are mentioned below:

  • NASDAQ stands for National Association of Securities Dealers Automated Quotations. On the other hand, NYSE stands for New York Stock Exchange.
  • The NASD is the founder of the NASDAQ. On the other hand, the founders of NYSE are - Trowbridge & Livingston and B. Post.
  • NASDAQ was founded in 1971. Whereas, NYSE was founded in 1871.
  • NASDAQ is located on a floor of the MarketSite tower in New York City's Times Square. On the other hand, The NYSE is located on Wall Street in New York City.
  • NASDAQ is a kind of dealer’s market. While NYSE is a kind of auction market.
  • There are around 2,900 companies listed on NASDAQ. Whereas, there are around 1,860 listed on NYSE.
  • NASDAQ is open for trading on weekdays from 9:30 am to 4:00 pm ET. A pre-market session is held from 7:00am to 9:30am and post-market session from 4:00pm to 8:00pm. Contrarily, the NYSE is open for merchandising Monday to Friday from 9:30 a.m. to 4:00 p.m. ET. When these fall on a Saturday, the NYSE is sometimes closed on the foregoing Friday.
  • CEO of NASDAQ is Bob Greifeld. CEO of NYSE is Duncan L. Niederauer.
  • For NASDAQ, the listing fee is $50,000 to $75,000. Whereas, the listing fee for NYSE is up to $250,000.
  • The NASDAQ exchange provides investors an approach to investing in much more volatile, possibly higher-growth securities than other exchanges that provide more stable, conventional companies. Contrastingly, the NYSE Exchange is provided for well-established companies.
  • The stock ticker of NASDAQ is NASDAQ. Whereas, the stock ticker of NYSE is ICE.

Conclusion

The key difference between Nasdaq and NYSE lies in their markets. Nasdaq is a dealer’s market, whereas NYSE is an auction market. Well, we have discussed the main topic which is the “Difference between NASDAQ and NYSE” in detail. For further information, tell us by commenting down below.

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"Difference Between NASDAQ and NYSE." Diffzy.com, 2022. Thu. 08 Dec. 2022. <https://www.diffzy.com/article/difference-between-nasdaq-and-nyse-834>.



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