Whenever investors talk about the stock markets in North America or around the world, two major exchanges come to mind – NYSE and NASDAQ. Both are the world’s largest stock exchanges with the largest market capitalisation. The buying and selling process on either of the exchanges may seem identical, but there are significant differences between the two. Here we summarize NYSE vs NASDAQ for easy understanding.
What is NYSE?
NYSE stands for New York Stock Exchange. It was incorporated in 1792 in New York City. Also, NYSE is the world’s largest stock exchange based on total market capitalization. It lists more than 2,800 stocks and also includes many US blue chip stocks. Moreover, this exchange is owned by Intercontinental Exchange Inc (ICE), which purchased NYSE in 2013.
What is NASDAQ?
NASDAQ stands for National Association of Securities Dealers Automated Quotations. NASDAQ was founded in 1971 and is also the first electronic stock exchange. It was the first to use computers to match buyers and sellers. Furthermore, in 2006, it separated from the National Association of Securities Dealers to become its own publicly traded company. Today, this exchange is also the global electronic marketplace for trading securities where the world’s largest technology companies are listed – Apple, Amazon, Google, etc.
Difference Between NYSE and NASDAQ
The following table summarizes NYSE vs NASDAQ.
|Acronym||New York Stock Exchange||National Association of Securities Dealers Automated Quotations|
|Type of Market||Auction Market – is a system based on buyers and sellers entering competitive bids at the same time.||Dealers Market – a type of market where multiple dealers post prices at which they buy or sell a specific stock.|
|Market Capitalisation||$26.2 trillion||$30.55 billion|
|Number of companies listed||2,400 approximately||3,700 approximately|
|Location||New York City, NY||New York City, NY and Marwah, NJ|
|Indices||It includes NYSE 100 and NYSE composite||It includes NASDAQ composite, NASDAQ 100 and NASDAQ biotechnology|
|Traffic control||Specialist – it matches the bids and offers and then paired together with the orders that are being executed.||Market maker – a member firm or market participants such as a brokerage firm or bank that actively buys and also sells stocks on behalf of traders. Moreover, they ensure an efficient trading process.|
|Volatility||Stocks are less volatile||Stocks are more volatile|
|Listing fees||Entry fee – $500,000|
Yearly listing fee – based on the total number of shares and capped at $500,000
|Entry fee – $50,000 to $75,000|
Yearly listing fee – $27,500
|Leader||This stock exchange is the leader in accrued market cap of listed companies.||This stock exchange is a leader in market share and also the volume of shares traded.|
|Trading method||Physically||Through telecommunication|
|CEO||Ducan L.Niederauer||Bob Greifeld|
As seen above, NYSE vs NASDAQ are different in the way they operate and also different in their constituents. Furthermore, there are different listing requirements that the company has to follow to be listed on either of the stock exchanges. However, there is no difference in how each stock trades, but it is essential to know how the exchanges work to make informed decisions.