What Is the Difference Between the NYSE and NASDAQ Stock Systems?


Quick Answer

The primary difference between the New York Stock Exchange and Nasdaq is in the manner in which the two markets execute security transactions between buyers and sellers. According to Forbes, the NYSE is a tangible auction-style market, while the Nasdaq is a fully automated system without a central location.

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What Is the Difference Between the NYSE and NASDAQ Stock Systems?
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Full Answer

The Nasdaq prides itself on being a dealer's market, where buyers and sellers conduct transactions with a market maker, as oppose to one another. It is a system of inter-connected computer networks, as oppose to a tangible marketplace. This format directly contrasts with the NYSE's auction-based market, where individuals buy and sell with one another.

In addition to how the exchanges' securities change hands, the securities themselves are also categorically different. According to the Nasdaq's website, it is home to the bulk of blue-chip technology companies, including Cisco, Oracle, Intel, Microsoft, Google and Facebook. This tech-heavy focus differs greatly from the NYSE, which is home to diversified conglomerates and consumer staples, such as Wal-Mart, General Electric, Coca-Cola and Citicorp.

According to the New York Stock Exchanges website, the NYSE institutes more stringent listing criteria relative to the Nasdaq and other exchanges. The NYSE requires its companies to maintain at least 2,200 shareholders, a monthly trading volume of at least 100,000 shares, a market valuation of at least $100 million and annual revenues of at least $75 million. Companies that do no meet these requirements are not eligible for listing on the NYSE and those that dip below these thresholds may be removed from the exchange.

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