What Is the AMEX?
The AMEX is an acronym for American Stock Exchange. It was one of the big three American stock exchanges, but in 2008 it was purchased by the NYSE Euronext exchange group. It was renamed the NYSE Alternext U.S. At one time the AMEX rivaled the New York Stock Exchange, but it lost much of its importance since the 1990s.
Other People Are Reading
-
Identification
-
For decades, the AMEX was the No. 3 American stock exchange in trading volume. The AMEX has a far smaller market share than the NYSE and NASDAQ. The AMEX has marketed itself as an alternative stock exchange, offering securities not always available on the other exchanges. In addition to stocks, stock options and derivatives, the AMEX trades income deposit securities, stock market indexes and exchange traded funds.
History
-
The AMEX was officially established in 1842; at that time it was called the U.S. Curb Exchange. Brokers would stand on Broad Street in New York City and trade securities not deemed worthy of the New York Stock Exchange. In 1921, the AMEX moved into a building at 86 Trinity Place. In 1953, the name was changed to the American Stock Exchange, which was abbreviated AMEX. In 1998, it was purchased by the owners of the NASDAQ stock exchange. They operated independently under the same ownership until the AMEX was spun off in 2004. In 2008, NYSE Euronext bought AMEX and merged it with Alternext European small-cap exchange. It was renamed NYSE Alternext U.S. but continues to operate the same way AMEX did before the acquisition.
-
Considerations
-
The AMEX has a reputation for allowing companies to trade on its exchange that wouldn't be accepted by the NYSE or NASDAQ. Its liberal rules have led to abuse. In the mid 1990s, penny stock promoters used the AMEX to make a lot of money at the expense of a lot of investors who went broke. While the liberal rules have been criticized, they give small companies an opportunity, to appear on a major stock exchange that they would not have anywhere else.
Benefits
-
The AMEX offers benefits not offered by other stock exchanges. It is the primary place to buy and sell exchange-traded funds. The AMEX was the innovator of ETFs. They consist of securities like stocks and bonds, often reflecting an index like the S&P 500 or the Dow Jones Industrial Average. ETFs are popular with investors who want an inexpensive way to invest in a market index or sector. The AMEX has more than 140 exchange-traded funds.
Effects
-
The continued viability of the AMEX is important for small-cap stocks, which may have nowhere else to trade otherwise.
-
