The New York Stock Exchange (NYSE) is the largest stock exchange in the world by market cap.
Nicknamed the “Big Board,” the NYSE has been home to some of the largest and most prestigious publicly traded businesses for over 200 years. Formerly run as a private organization, the exchange itself became a public entity in 2006. It was later acquired by the Intercontinental Exchange in 2013.
Today, the NYSE claims many of the securities in the S&P 500 and Dow Jones Industrial Average indices among its listings.
One of the NYSE’s primary functions is to provide a central marketplace where investors can trade securities. Historically, the exchange facilitated the process by way of floor traders who matched buyers and sellers. But since 2007, the exchange has largely shifted to an electronic trading process that functions in much the same way.
The New York Stock Exchange also acts as a gateway for companies to offer initial public offerings (IPOs) and sell shares and raise capital. Both U.S.- and foreign-based corporations can list on the exchange as long as they meet the NYSE’s listing requirements and the SEC’s disclosure requirements.
Most investors aren’t members of the NYSE. Fortunately, brokerages act as the middleman between the NYSE and individual investors who want to trade exchange-listed securities. When a brokerage customer places an order, the company passes the order to its NYSE operations to execute the trade.
However, the NYSE isn’t open 24/7. Trading hours are marked by the opening and closing bells, which ring at 9:30 a.m. and 4:00 p.m. Eastern Time, Monday-Friday. (Fun fact: the bells were traditionally rung by floor managers. But since 1995, the exchange has invited thousands of company executives, athletes, celebrities, and government officials to ring the bells.)
The exchange also observes several federal holidays, during which times the trading floor closes. The market also takes two half-days per year, closing at 1:00 p.m. ET the Friday after Thanksgiving and on Christmas Eve.
During these “closed” periods, investors can’t trade directly through the NYSE. However, electronic communications networks (ECNs) allow investors to trade after-hours using “limit orders.” Historically the domain of institutional and high-net-worth investors, many online brokerages have opened these sessions to the average investor.
Investors rely on the New York Stock Exchange for opening and closing the trading day and providing a mechanism to facilitate investment. As an investor, you’ve likely relied on the NYSE to build your portfolio (and will in the future) – even if you never knew it.
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