Difference Between NASDAQ and NYSE

NASDAQ vs NYSE
 

Stock markets are exchanges on which securities are traded among buyers and sellers. There are a number of stock markets that operate around the world, out of which the New York Stock Exchange (NYSE) and NASDAQ are two prominent stock markets in the United States. Both these exchanges oversee a majority of the equities traded in the United States and worldwide. There are, however, a number of differences between the two stock markets in terms of the types of equities traded and the manner in which they are operated. It is important for any equities trader to understand the difference between the two. The article that follows offers a clear explanation of each stock exchange and highlights their similarities and differences.

NASDAQ

NASDAQ is an electronic computerized stock market which was the very first of its kind to be established in 1971. As opposed to manual trading and a physical floor, the NASDAQ exchange handles all stock trading transactions by a computerized system. NASDAQ facilitates trading on over 5000 over the counter (OTC) stocks. Stocks that are listed on NASDQ generally comprise of 4 letters unless they were transferred from the NYSE in which case they would remain as 3 letters. Stocks that are traded on NASDAQ are known to be high tech stocks such as Microsoft, Dell, Cisco, Intel, etc. Stocks traded on NASDAQ are also known to be growth oriented and quite volatile; firms that went public recently and have good growth potential.

NASDAQ is a dealer’s market in which dealers sell securities directly to investors by using phones or the internet. The listing cost for a company to list NASDAQ is roughly between $50,000-$70,000, with yearly listing fees at about $27,500.

NYSE

NYSE is a stock market that is based in New York in United states and is known to be the largest stock exchange in the world in terms of the total market capitalization of all the securities listed on the NYSE. Started up in 1792 the NYSE is home to some of the most well established firms in the world. The NYSE was a private organization up until 2005 in which year it was made a public entity. In the early days, most trading was done on a physical floor. Today, most trades are completed using computerized systems, but trading is still done on trading floors in New York.

The NYSE is an auction market in which individuals interact with each other to buy and sell securities and the highest bidding price will be matched to the lowest asking price to complete the trade. The listing cost for NYSE can be up to $250,000, with a yearly listing fee up to $500,000.

What is the difference between NASDAQ and NYSE?

The NYSE and NASDAQ are prominent stock exchanges in the United States in which majority of the world’s equities are traded. As public exchanges, both NASDAQ and NYSE are under obligation to follow the requirements that have been put forth by the Securities and Exchange Commission (SEC). There are a number of differences between the stock exchanges in terms of how they operate, the listing cost, types of stocks traded, etc. The NYSE is an auction market in which the highest bid is matched with the lowest ask while the NASDAQ is a dealer’s market in which dealers trade directly with investors. NYSE operates electronic as well as floor trades, whereas NASDAQ is a completely computerized system. NASDAQ is home to high tech companies that are startups (or recently publicly listed) with great growth potential, whereas NYSE is home to some of the oldest most established firms; this may be due to the fact that listing costs for the NYSE is much higher than for NASDAQ.

Summary:

NASDAQ vs. NYSE

• Stock markets are exchanges on which securities are traded among buyers and sellers. There are a number of stock markets that operate around the world, out of which the New York Stock Exchange (NYSE) and NASDAQ are two prominent stock markets in the United States.

• NASDAQ is an electronic computerized stock market which was the very first of its kind to be established in 1971.

• NYSE is a stock market that is based in New York and is known to be the largest stock exchange in the world in terms of the total market capitalization of all the securities listed on the NYSE.

• There are a number of differences between NASDAQ and NYSE in terms of how they operate, the listing cost, types of stocks traded, etc.

• The NYSE is an auction market in which the highest bid is matched with the lowest ask while the NASDAQ is a dealer’s market in which dealers trade directly with investors.

• NYSE operates electronic as well as floor trades, whereas NASDAQ is a completely computerized system.

• NASDAQ is home to high tech companies that are startups (or recently publicly listed) with great growth potential, whereas NYSE is home to some of the oldest most established firms; may be due to the fact that listing costs for the NYSE is much higher than for NASDAQ.