Difference between NASDAQ and NYSE

Key difference: NASDAQ and the NYSE are two different stock exchanges. NASDAQ is an American stock exchange. NASDAQ stood for National Association of Securities Dealers Automated Quotations. It is the second-largest stock exchange by market capitalization in the world. The New York Stock Exchange (NYSE) is the world's largest stock exchange by market capitalization of its listed companies. The NYSE is located in New York City, USA.

NASDAQ and the NYSE are two different stock exchanges. According to Wikipedia, a stock exchange is “a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.”

The NASDAQ is an American stock exchange. NASDAQ stood for National Association of Securities Dealers Automated Quotations. It is the second-largest stock exchange by market capitalization in the world. The New York Stock Exchange (NYSE) is the world's largest stock exchange by market capitalization of its listed companies. The NYSE is located in New York City, USA.

There are a number of differences between the two stock exchanges. The main difference is in the manner that they handle trades. The NASDAQ is a telecommunications network, which means that all of its trades are handled over a telecommunications network. The trades on the NYSE, on the other hand, occur at a physical location: the trading floor in New York City. This means that if somebody wants to buy or sell on the exchange, their broker must physically go down to the trading floor and handle the trade.

The way in which the securities on the exchanges are transacted also differs. The NASDAQ is a dealer's market, which means that the investors are buying through a dealer. On the NYSE, the investors are buying and selling between one another. Hence, it makes the NYSE, an auction market, where the highest bidding price will be matched with the lowest asking price.

The market perception of the two exchanges also differs. Most investors consider NASDAQ as a high-tech market as many firms listed on it are internet or electronics based. So, the stocks on this exchange are considered to be more volatile and growth oriented. Volatility is the change that the stocks see. As far as the security’s price is concerned, high volatility would mean more ‘ups’ and ‘downs’, whereas less volatility would mean less fluctuation.

As compared to NASDAQ, the NYSE is considered to be better established. This is mainly due to the fact that NYSE lists many “blue chip firms and industrials” that have been in existence for a long period of time. These companies are considered to be stable and established.

 

NASDAQ

NYSE

Acronym

National Association of Securities Dealers Automated Quotations

New York Stock Exchange

Launched in

1971

1792

CEO

Bob Greifeld

Duncan L. Niederauer

Location

A telecommunications network

Trading floor in New York City

Market type

Dealer’s market

Auction market

Process of Trade Execution

Broker contacts market maker or uses online form

Broker contacts specialist floor trader or enters it into DOT system

Entry fee for stock listening

$150,000

$250,000

Yearly fee

$60,000

$500,000

Public or private

Public

Public since 2006

Total market capitalization of listed companies

$4.44 trillion as of January 2012

$14.242 trillion as of December 2011

Trading schedule

Weekdays 9:30am to 4:00pm ET; a pre-market session 7:00am to 9:30am and post-market session from 4:00pm to 8:00pm

Weekdays 9:30am to 4:00pm ET with the exception of holidays declared by the Exchange in advance.

Image Courtesy: thejanedough.com, mytravelphotos.net

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