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The Stock Market
Stocks change hands every trading day on traditional and electronic markets.
Wall Street and Beyond
Other U.S. Markets
Seats, at a Price
The Electronic Stock Market
Over-the-Counter Trading
The first stock exchange in America was organized in Philadelphia in 1790. But by the time the traders who met every day under the buttonwood tree on Wall Street adopted the name New York Stock Exchange in 1817, New York had become the center of market action.

The rival New York Curb Exchange was founded in 1842. Its name said it all: Trading actually took place on the street until it moved indoors in 1921. In 1953, the Curb Exchange became the American Stock Exchange.


A STREET BY ANY OTHER NAME
Wall Street, which got its name from the stockade built by early settlers to protect New York from attacks from the north, was the scene of New York's first organized stock trading. Now it lends its name to the financial markets in general though lots of traders never set foot on it.

WALL STREET AND BEYOND
As more and more trading is conducted by telephone and computer, the original stock exchanges that provide centralized facilities for trading, such as the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX), have come to be known as traditional markets to distinguish them from the newer electronic markets that allow brokers to trade from their offices all over the country. However, traditional markets take full advantage of the latest technology to maximize the efficiency and volume of their trading.

OTHER U.S. MARKETS
Stocks listed on the NYSE or AMEX may also be traded in one of the smaller regional exchanges, including Chicago, Boston and the Pacific Exchange in Los Angeles. In addition, some smaller, regional companies are listed only on the exchange in their area. The most actively traded of those companies are listed in the U.S. Regional Markets column of The Wall Street Journal.

Transactions handled on the regionals can be faster, and sometimes cheaper, than transactions on the larger exchanges, which encourages competition among the exchanges. However, trading results for all of the stocks listed on both the NYSE and the regional exchanges are combined daily into a single statistic in the NYSE Composite Trading table.

SEATS, AT A PRICE
The NYSE and AMEX are private associations that sell memberships, or seats, permitting brokers to trade on the exchange. The NYSE currently has 1,366 members, and the AMEX has 874. Generally, the cost rises and falls with the market.

REQUIREMENTS FOR STOCK MARKET LISTING
The major U.S. stock markets impose specific requirements that companies must meet before their stock can be listed or traded on that market. If they qualify for all three, the companies can choose where they wish to be traded.
EXCHANGE REQUIREMENTS* TYPICAL DAILY VOLUME* NUMBER LISTED*


New York Stock Exchange
1.1 million publicly held shares minimum; $100 million minimum market capitalization 1.082 billion shares 2,968


Nasdaq Stock Market
1.1 million publicly held shares minimum; $8 million minimum market capitalization 1.77 billion shares 4,830


American Stock Exchange
500,000 publicly held shares minimum; $3 million minimum market capitalization 31.3 million shares     772
*As of March 2000

THE ELECTRONIC STOCK MARKET
Unlike traditional exchanges, the Nasdaq Stock Market has no central trading location and no exchange floor. Rather, it's an advanced telecommunications and computer network run by the National Association of Securities Dealers that allows brokers to monitor stock prices, match orders and make trades from anywhere in the country. The Nasdaq is the country's largest market, listing nearly 5,000 companies, from small, emerging firms to corporate giants, such as Microsoft and Intel. It also trades more shares daily than any other U.S. market.

In 1998, the Nasdaq merged with the AMEX the country's second-largest traditional exchange. Although they continue to operate as separate markets, the Nasdaq and the AMEX are united under a single management and are part of a technologically sophisticated network of worldwide markets.

Computer-based, rather than face-to-face, stock trading is assuming an increasingly important role, not only in the U.S. but around the world. Trading in London and Tokyo, for example, is exclusively electronic. The same is true of most of the stock markets in emerging nations.

OVER-THE-COUNTER TRADING
Stocks in more than 9,800 small and new companies aren't listed on either the Nasdaq or a traditional market. Instead, they're bought and sold over the counter (OTC). The term originated at a time when U.S. investors actually bought stock over the counter at their local broker's office. Today, transactions are handled over the telephone or by computer.

Many OTC stocks are comparatively inexpensive and infrequently, or thinly, traded, and their prices aren't reported regularly. There are two quotation services for OTC stocks the pink sheets, published by the National Quotation Bureau, and the OTC Bulletin Board (OTCBB). Both quotation services provide online real-time quotations for OTC stocks the Bulletin Board for the approximately 4,300 OTC stocks that are registered with the SEC, and the National Quotation Bureau for the stocks that are not registered.

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This page was last updated: June 2000