The New York Stock Exchange also referred to as the Big Board, is America’s biggest stock exchange situated in the Wall Street, Lower Manhattan within the New York City. It is not only America’s largest stock exchange but also the biggest in the world in terms of market capitalization. The average daily value of trading in New York stock exchange is around 170 billion dollars. The market capitalization of listed companies is around 20 trillion dollars.
The trading floor of the New York Stock Exchange is located in the Wall Street. It has 21 rooms which are used by traders. There was another room on Broad Street that was closed in 2007. The NYSE building on Wall Street is a National Historic Landmark.
When America was founded, a group pf people established the New York Stock Exchange. It was initially located at 68 Wall Street. In 1792, the Button Wood agreement was signed and the first trading took place. The name of the said agreement was taken from the Button Wood trees that grew in the vicinity. It was a time when people used to carry out meetings at coffee houses and other such places. The very first trading was carried out with just 24 brokers.
At that time, the same 24 stock brokers had been allowed to trade between themselves. The rate of commission was set at 0.25% for every trade. Only government bonds and stocks of banks were traded initially. The Button Wood agreement stipulated trading of companies as well. Bank of New York became the first company to be traded on the New York Stock Exchange.
The Button Wood agreement became formalized in 1817. Consequently, the NYSE Board was established. Anthony Stockholm became the first president of the board. At that time, thirty stocks were traded as the NYSE. In 1868, there were only 533 seats. Presently, there are 1366 seats on the board.
The NYSE is open every day. There are only two exceptions to this fact. It was closed for a few days when the Great War began, and again after the twin towers went down in 2001.
NYSE bought Archipelago – a trading group – in 2005. After this purchase, the NYSE also began functioning as a profit-oriented business. Businesses are not offered board seats at the exchange. Rather they get annual licenses allowing them to do business with the exchange.
Presently, almost fifty countries from around the world are able to trade around 3000 stocks through the New York Stock exchange. This exchange facilitates coming together of buyers and sellers so that they are able to carry out trades with each other. The exchange works in an auction-based environment which is designed in order to arrive at a fair price for both the buyer and the seller.
The trading floor of the New York stock exchange still works in the auction format. In fact, this characteristic differentiates it from the rest of the markets in the world. The auctioneers at the New York stock exchange are highly trained and subject of more than one super hit movies.