The NYSE is the largest stock exchange in the world by market capitalization. It is located on Wall Street in New York City and is operated by Intercontinental Exchange (ICE). The NYSE symbolizes the American financial system and has a long history from 1792. Key points about the NYSE:
- History: The NYSE was founded on May 17, 1792, when 24 stockbrokers signed the Buttonwood Agreement on Wall Street. This agreement established the rules for trading stocks and laid the foundation for the NYSE.
- Listings: The NYSE is home to many of the world’s largest and most well-known companies, such as JPMorgan Chase, Exxon Mobil, Coca-Cola, and General Electric. Companies must meet strict financial and regulatory requirements to be listed on the NYSE.
- Trading system: Historically, the NYSE used a floor-based trading system, where transactions were made through face-to-face interactions between floor brokers and specialists. In recent years, the exchange has adopted electronic trading systems to complement the floor-based system.
- Auction process: The NYSE uses an auction process to set stock prices. This process involves buyers and sellers submitting bids and offers, with a designated market maker (formerly known as a specialist) facilitating the trades and maintaining a fair and orderly market.
- Market indices: The NYSE is home to several well-known market indices, including the Dow Jones Industrial Average (DJIA) and the NYSE Composite Index, which track the performance of a subset of companies listed on the exchange.
- Regulation: As a stock exchange, the NYSE is regulated by the U.S. Securities and Exchange Commission (SEC) and is subject to the rules and oversight of the Financial Industry Regulatory Authority (FINRA).
- Merger with Euronext: In 2007, the NYSE merged with Euronext, a European stock exchange, to form NYSE Euronext. In 2013, ICE acquired NYSE Euronext and later spun off Euronext as a separate entity, while retaining ownership of the NYSE.
The NYSE is a symbol of the global financial system and plays a crucial role in facilitating capital formation and economic growth by providing a platform for companies to raise funds and for investors to buy and sell securities.