Nyse and Nasdaq

NYSE and NASDAQ

Financial Management

FINA310-1203B-02

Abstract

The NASDAQ and the NYSE are stock exchanges located in the heart of Wall St. in New York City. Both stock exchanges are rated as the top two world-wide with the NYSE leading the way (Ridder, 1994). In this paper the dissimilarities and similarities of both stock exchanges will be discussed in addition to The Investor Protection Act of 2002 and The Public Company Accounting.

There are many ways that the NASDAQ and the NYSE are alike. Both exchanges make up the majority of trades related to shares of companies with-in the European and U.S stock market. Each exchange specializes in stock trading options, fixed incomes, exchange traded goods and cash equities. Both stock exchanges keep the flow trading going in reference to the market with their own traffic controllers. Without the controllers the trading floor would be needless to say chaotic (Weinberg, 2003).

Even though the NYSE and NASDAQ similarities are very far and few between there indeed are some. NASDAQ and the New York Stock Exchange are alike in reference to they are both very well known major stock exchanges offering high end services. They're also similar because they are both high demanded publicly traded companies with platforms used for the trading of stocks and securities (Weinberg, 2003).

A major dissimilarity between the NASDAQ and the NYSE is in the way both companies operate. On one hand, the NYSE is a "real" trading company. They physically trade stocks utilizing floor traders or brokers to make stock exchanges on the behalf of their companies. While on the other hand, the NASDAQ trading is done almost completely by computers. Their stockholders are facilitated with a straight contact system (Weinberg, 2003). The NASDAQ components are mostly technology, Internet-based and electronic companies such as Oracle, Amazon, Sun, Apple, Microsoft, Cisco, Intel, Google and E-Bay (NASDAQ, n.d). These big high-end technology companies are one of the reasons why NASDAQ is often looked at as a high-tech market exchange.

In contrast, the New York Stock Exchange consist of companies that are more established and have been around for many, many years such as Coca-Cola, GE, Wal-Mart and Citicorp (NYX.com, n.d). When it comes to investors to listing their stocks on the two exchanges there's even a difference in the cost. For NASDAQ the largest rate of investment is $1,050,000 in addition to an annual fee of $60,000. For the New York Stock Exchange, the largest fee paid to be listed is $2,050,000 in addition to an annual fee of $5,000,000 (Weinberg, 2003). As a result, according to the above figures, the NASDAQ looks to be more cost effective.

The volatility characteristics of the NASDAQ and the NYSE also differ.

Volatility is the volume of returns an individual can expect from investing. Having a high volatility in reference to the security's price means more fluctuation. Having a lesser volatility specifies that there is less ups