The term "The Big Board" refers to the New York Stock Exchange, with the trading floor located at 11 Wall Street. The New York Stock Exchange has been on Wall Street for more than 200 years, starting with an agreement under a buttonwood tree near 68 Wall Street. NASDAQ is new in comparison with the NYSE, with an agreement between the National Association of Securities Dealers and trading beginning in 1971. NYSE and NASDAQ both trade stocks in the Wall Street financial district, with each exchange trading different stocks.
NYSE has the famous ticker and auctions on the floor. Floor traders carry hand-held computers and use a wireless system installed in 1996. NYSE includes trades for about 2,800 companies, and each company uses a specific area of the floor for trading. The NYSE format works with a broker who conducts the auction for the company in the public trading area. Personalities and judgments, in combination with electronic transactions, can all affect the market price.
The computer age brought electronic trading and the NASDAQ to the stock market. The National Association of Securities Dealers Automated Quotations created the NASDAQ acronym, establishing NASDAQ as an electronic trading company. NASDAQ OMX Group is a publicly traded company that owns NASDAQ and European stock exchanges. It has a reputation for handling trades quickly and efficiently. NASDAQ currently has a core of computer and tech stock companies, but originally was a computer bulletin board, not a stock exchange and not in competition with NYSE.
NYSE and NASDAQ Differences
NYSE has a base of public companies developed over the years, many of which predate the opening of NASDAQ. NYSE includes banks, insurance companies and manufacturers. J.P. Morgan Chase, The Travelers and Proctor & Gamble trade on the NYSE. NYSE has both computer trades and live trading after the opening bell. NASDAQ was set up for electronic trading and conducts all trading by computer. NASDAQ attracts new companies with innovation and technical advances, including a large number of companies who raise capital through the IPO or initial public offering. The NASDAQ exchange initially attracted tech stocks and provided capital to fledgling companies. NASDAQ sold technology to power other exchanges starting in 1991 and broke away from the National Association of Securities Dealers in 2006. NASDAQ joined with OMX, a Scandinavian exchange group, in 2007 and is a public company traded as NDAQ.
The Dow Jones Industrial Average is a calculation of primarily NYSE stocks, reporting an average at any time the stock market is open. The DJIA includes powerhouse stocks like Johnson & Johnson and Kraft Foods, giving a broad composite of the ups and downs by the minute. The NASDAQ reports a similar average comprised of stocks listed with NASDAQ. A follower can check either average to see if the market is up or down, but the primary tech stock indicator is NASDAQ. The NASDAQ composite includes a diverse group of more recently founded companies such as Dell and Google along with restaurants such as Denny’s and Starbucks.
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