The Exchange in America came into being due to the practical needs of the traders and its history travels back to 1842. The place in the city of New York, which would later become historical, was at the curbstone Broad Street adjacent to Exchange Place. The arrangements for trade were rustic and had fictional characteristics. Traders assembled near letter boxes and lamp posts and exhibited particulars of securities, the new government ones, for sale, in tight weather conditions. Din is the characteristics even now at the stock exchanges all over the world, though computerization of the dealings has curbed it to some extent. But the vocal chords of the stock brokers that gather in the exchange hall for trading activity are still strong.
As the volume of trading activity increased the traders perfected a ‘sign’ language that could be decoded just by the concerned fraternity. The market shifted to closed premises in 1921 at 86 Trinity Place, Manhattan. The ‘sign’ language was still accepted as the authoritative transcript for the securities transaction. In 1978, the building was categorized as a National Historic Landmark.
Along with the trade, greed of the traders also increased. When greed intervenes amidst the fair trade practices, scandals follow. In 1999, The Business Week brought to light the goings on with the trading circle and the investors reacted with shock. AMEX merged with NASDAQ and a new company “The Nasdaq-Amex Market Group” was formed. AMEX retained its original identity and NASD was the parent company. Tensions relating to dealings crept in between the members of the two companies which resulted in AMEX gaining control over NASD in 2004.
Now three exchanges exist in America—the New York Stock Exchange, NASDAQ and American Stock Exchange. As for stock exchange, this is the third largest market and accounts for 10% of the trading companies in U.S.A. Industries that do varied businesses are listed in these exchanges. It offers trading opportunities to many small groups of companies.
With computerization, the pattern of trading in the American Exchanges has totally transformed. A transaction of each share is followed by the computers and the price of the share generally depends on the demand. In the context of globalization, American Exchanges keep pace with other international exchanges; so each exchange is independent at the same time in terms of trade and prices of the share it is interdependent.
What happens in one Exchange has direct and immediate bearing in the other or all Exchanges.
The computerization has left beneficial results on the operations in the stock exchange, and the one area that it has profoundly affected is the statistics related to many thousands of stocks. Of the three exchanges AMEX is the common man’s exchange. As for listing, it follows the most relaxed policies, as compared to the other two Exchanges. Most of the listed companies in AMEX are small, as compared to NYSE and NASDAQ. It specializes in trading in ETFs. This statistics-oriented Exchange records the all-important stock market indices, which is of necessity from the point of view of brokers and investors.
Some of the important indices are Inte@active Week Internet Index related to the stock of internet companies. It is developed indices known as Inellidexes, which make an attempt to gain alpha by calculating indices taking into account the fundamental factors. The AMEX Composite is a value-weighted index, relating to all the shares listed in the exchange.
Computerization has put the individual successful-investors/”title=”investor ” >investor on the winning spree. The NSADAQ OMX Group Inc. provides the final quote of thousands of listed shares, and this information benefits millions of investors to take decisions for their next day’s opening trade and take better estimate of the market moods. Formerly this service was on payment basis with the brokers as subscription fees. Now the one gets it free.