How Are AMEX and Nasdaq Similar?

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By Chris Seabury
eHow Contributing Writer

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The world of stock trading has become complicated with the amount of stock exchanges that exist. This is the case with both the AMEX and Nasdaq stock exchanges. The AMEX stands for the American Stock Exchange, while Nasdaq stands for the National Association of Securities Dealers Quotation System. They both have many characteristics that make them similar. It is through understanding these similarities that allows you to become a more informed investor.

In the Shadow of the NYSE

The New York Stock Exchange (NYSE) has some of the strictest listing standards of all U.S. stock exchanges. The AMEX was created to provide smaller and medium size companies the chance to have their companies listed on a stock exchange that was not as selective as the NYSE. The Nasdaq was created in the 1970s when phone and electronic communications became more common. High-tech companies listed on the Nasdaq include big names such as Google and Apple.

Special Orders

Both Nasdaq and the AMEX handle orders for both individual and institutional clients. You can place a variety of different execution orders when placing trades. This would include market, limit and stop orders.

Investment Products

The AMEX offers a variety of investment products such as stock, options and exchange traded funds (ETFs). The Nasdaq offers stock, ETFs and listings in up to 37 different countries.

Known Quantities

The Nasdaq and the AMEX are well known stock exchanges. This means that unlike other regional stock exchanges, they have more liquidity and list some of the fastest growing companies in the country.

They Are One Stock Exchange

NASDAQ and the AMEX are jointly owned, meaning they merged, yet they continue to be operated separately.

Competitive Exchanges

Many of the nation's stock markets are disappearing as electronic trading becomes more common. In the case of the Nasdaq and the AMEX, both have taken steps to remain competitive with both offering electronic trading. In the case of the AMEX, it offers a combination of both electronic trading and floor trading. These aggressive actions taken by both stock exchanges have kept them competitive in an increasingly electronic world.