So What is the New York Stock Exchange?
In the stock market you have different “exchanges” which are different places to buy and sell stock. The NYSE or New York Stock Exchange, also known as the “Big Board” are one of the main exchanges on the stock market. The NYSE has some requirements in order for a company to be listed there, Here are some of those requirements:
- A company must have at LEAST 1.1 Million publicly traded shares of stock.
Must have at least 1.1 Million shares available to be bought by the public.
- Must have a market value of at LEAST $100 Million
The value of all those shares put together should equal $100 Million or more!
- Have a pretax income of at least $10 Million over the THREE most recent fiscal years.
Before taxes the company should make at least $10 Million in the past 3 full business years.
- Have had earnings of at LEAST $2 Million in the two most recent fiscal years.
Company has made at least $2 Million in the past 2 full business years.
The New York Stock Exchange is the Largest stock exchange in the world with a total market cap of $19 Trillion (as of April 2016) and over 450 Billion shares available for trading!
History of the New York Stock Exchange
Back in the old days (before computers took over) the NYSE was your classic movie scene, people screaming at the tops of their lungs and running around bumping into each other trying to get a order placed. IT WAS CRAZY!
Today, everything is done electronically even with the help of computers the NYSE still has a similar pattern to trading. Now we:
- A customer contacts their broker by phone or online.
- The Broker contacts the floor trader.
- The floor trader brings the request to a specialist in that specific stock
- The Trade gets written and completed.
Thanks to technology the trading floor is not anywhere near as hectic as it once was. All the noise has been silenced by the quiet hum of computers.
The NYSE is affected by the worlds events, it has seen some great ups and terrible downs.
On October 27, 1997, Dow fell 554 points that day which triggered the NYSE “circuit breaker” rule which stops ALL trading activity when the market might be headed for a crash, this is a good fail safe to ensure safe trading through that day when the market is weak and volatile.
after the September 11 terrorist attacks in 2001 the NYSE closed for 4 DAYS then proceeded to fall 685 points which was the largest single day points decline in history at the time.
The NYSE is now currently under control of the ICE (Intercontinental Exchange) which bought the NYSE for a whopping $8.2 Billion!!!
Although the NYSE operates the same, its still just another position in someones portfolio.