Nasdaq and the Nyse Similarites and Differences

FINA310

IP#1

The World of Finance

Donna Rothmann-Ranels

American Intercontinental University

Abstract

The NYSE and NASDAQ are similar because they are both well known in trading venue and both are very much in demand. These two trading organizations are different in how they work. This paper will discuss the similarities and differences between the two.

Introduction

The New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation (NASDAQ) have some similarities and differences. Many of the differences that these two trading organization have lie in how they operate or work. Both of these organizations are very well know in the trading venue.

NASDAQ

NASDAQ basically deals with electronics and technology or internet-based companies. Due to the type of companies they deal with, NASDAQ is often referred to the high-tech market. NASDAQ stocks are traded via telecommunications where investors have a direct contact system which enables the sellers and the buyers to have open communication. For an investor to list a stock on NASDAQ there is a fee. The highest fee that is paid for a listing is $1, 50,000 (NASDAQ vs the NYSE, n.d.). There is also an annual fee that is paid of $60,000. Stocks that are listed on NASDAQ are considered to have high volatility. This means that stocks on this market have higher returns and the price fluctuates up and down often (Difference between NASDAQ and the NYSE, n.d.).

NYSE

NYSE consists of older companies that are well established. These companies are usually very large organizations or blue chip organizations. The NYSE handles all their transactions physically. The NYSE has a trading floor in New York City where all their transactions take place (The NYSE and NASDAQ: how they work, 2009). There are people who work on the floor that make trades on behalf of their companies. There is also a fee to list a stock at NYSE. The fee could be as high as $2, 50,000 (Difference between NASDAQ and the NYSE, n.d.). The annual fee is about $5, 00,000. NYSE stocks are much more consistent with their prices. There is no much fluctuation. It is harder to list a stock on the NYSE because the rules