NYSE Stock Information
The New York Stock Exchange, or NYSE, is the largest exchange in the world. When people think of a busy stock trading floor full of traders shouting out buy and sell orders, they are likely envisioning the NYSE. In 2007, the NYSE merged with NYSE Euronext, an electronic exchange that auctions stock shares over a network of computers similar to NASDAQ. Thus, NYSE is a hybrid stock exchange that operates a traditional trading floor, as well as an electronic auction.
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Exchange
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NYSE is essentially a marketplace that facilitates the exchange of company shares between buyers and sellers. Companies that trade on NYSE must be listed there. NYSE serves several primary functions. Companies use the exchange to sell new shares to the public to raise money for operations and expansion. An exchange also offers investors a place to put their savings to work for them through company ownership. In addition, the NYSE composite serves as a useful barometer for the country's economic growth.
Composite
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The NYSE Composite is an economic index used to measure the strength of the financial markets. The popular Dow Jones composite combines the share prices of 30 leading industrial companies in the United States. The NYSE composite, by comparison, is much more reflective of economic growth as it provides an average price for more than 2,000 stocks listed on the exchange.
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Specialists
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NYSE transactions are all facilitated by an order specialist. Specialists are not employees of the exchange, but rather are employed by member companies. The exchange floor is organized into various area posts, each one facilitated by an order specialist. Traders gather around each post calling out buy and sell orders. It is the specialist's job to match buy orders with appropriate sell orders. Since 2007, buyers and sellers also have the option of buying and selling directly to one another electronically over the Euronext network.
Listing Requirements
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Companies that wish to have their shares traded on the NYSE must meet a very high standard. To be listed on the NYSE, a company must have sold at least one million shares of stock for a combined value of at least 100 million dollars. In addition, the company must have earned at least 10 million dollars over the past three years. Companies whose share price or earnings have dropped below these levels are delisted and must find an alternative exchange.
Other Products
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In addition to stocks, or company shares, NYSE facilitates trading in a number of other investment products. Exchange Traded Funds, called ETFs, are a relatively new investment product that allow investors to buy and sell index fund shares just like they would a stock. Mutual funds, derivatives, warrants and certificates are other popular investment products traded on NYSE.
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References
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