This article was originally published on Bankrate.com.
The New York Stock Exchange (NYSE) is the world’s largest stock exchange. It’s headquartered on 11 Wall Street and 18 Broad Street in New York City and is arguably the world’s most famous and recognizable stock exchange. Established in 1792, the organization became a publicly-traded company in 2006; from 1971 until 2006, it was a not-for-profit corporation.
What is a stock exchange?
A stock exchange is where shares of publicly-traded companies are bought and sold. While at one time, the trading floor at the NYSE was one of the busiest — imagine scurrying stockbrokers, yelling and hundreds of phones — trading action has moved primarily online. That said, the iconic image of someone ringing the opening and closing bells still remains one of the hallmarks of the NYSE.
NYSE trading hours
The core trading session runs from 9:30 a.m. to 4:00 p.m. Eastern time, Monday through Friday. The pre-opening session starts at 6:30 a.m. Eastern.
The stock exchange is closed on a number of federal holidays — but not all. Here are the NYSE days off:
- New Year’s Day
- Martin Luther King, Jr. Day
- Washington’s Birthday
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
History of the New York Stock Exchange
In New York City on May 17, 1792, two dozen stock brokers and merchants signed the “Buttonwood Agreement,” supposedly named for the type of tree under which the earliest transactions took place. The short document outlined the basic rules for trading securities, such as commissions, hours and a non-compete agreement among the brokers. The agreement was in response to the financial panic in March and April of the same year.
Trading was informal at first, and took place primarily in nearby coffeehouses. In 1817, however, the organization adopted a constitution and created the New York Stock & Exchange Board. It later adopted the name we know today. In 1865 the New York Stock Exchange moved to Broad Street, where it’s still partially located, although it has expanded in the interim years.
The stock ticker debuted in 1867, and in 1878, telephones were installed on the trading floor. The exchange continued to change and grow, and in 1903 moved into its current building, designed by George B. Post. The Classical Revival building, complete with columns and portico, is a National Historic Landmark and a popular tourist attraction. It was also the first place in North America to be air-conditioned. Computers were first introduced in the 1960s to help process data.
While technology and online trading have played major roles in the NYSE for decades, it wasn’t until the COVID-19 pandemic that the exchange moved purely to electronic trading and operated without a trading floor. It didn’t last long, however. After closing in March 2020, the floor reopened in late May.
Who owns the NYSE?
In 2013, Intercontinental Exchange (NYSE: ICE) acquired the NYSE and remains the parent organization. ICE is an American company that was founded in 2000.
Over its 200-year existence, the NYSE has acquired and merged with various companies, including the American Stock Exchange.
What is the oldest stock exchange?
There’s debate over the origin of the first stock exchange. Some scholars point to the founding of the Dutch East India Company in 1602 as the start of easily transferable shares. By 1680, the public engaged in transactions you’d recognize today, such as futures and options trading. The company eventually became the Amsterdam Stock Exchange. After a merger with a few other exchanges in 2000, it became Euronext.
Another contender is the Frankfurt Stock Exchange, also known as Borse Frankfurt. The exchange claims it was established in 1585. At a city fair that year, merchants met to establish uniform exchange rates. Additionally, the Frankfurt Stock Exchange traces its roots back to medieval fairs in the 11th and 12th centuries that hosted commercial and monetary transactions, eventually leading to Frankfurt becoming a banking and trading hub in the early 1500s.
What is the largest stock exchange?
The NYSE is the largest equities-based exchange in the world by market capitalization. As of late 2022, Nasdaq and the Shanghai Stock Exchange are the second and third largest, respectively.
NYSE vs. Nasdaq
To start, Nasdaq is much younger than the NYSE. Founded in 1971, it was the world’s first electronic stock market. More importantly, Nasdaq doesn’t have a trading floor, unlike the NYSE. Instead, all trades are electronic and its physical location in Times Square, MarketSite, is a broadcast studio. Nasdaq has lower listing fees and minimum earning requirements than the NYSE, which makes it more accessible to smaller companies. With this comes the potential of hosting more high-growth and volatile stocks than the NYSE.
For now, the NYSE is the largest stock exchange in the world, but that may not last as other exchanges close the gap. Regardless, its influence on the U.S. economy is enormous.
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