If one is interested in investing it is valuable to know who the main players in the stock market game are. The main players in the stock market are the exchanges. Exchanges are where the sellers are matched with buyers to both facilitate trading and to help set the price of the stock shares. As mentioned in the history section, the primary exchanges are the NASDAQ, the New York Stock Exchange (NYSE), all of the ECNs (electronic communication networks) and several other regional exchanges like the American Stock Exchange and the Pacific Stock Exchange. Not too long ago, all of the trading was done through the traditional exchanges (like the NYSE, American and Pacific Exchanges), but today most of the stock market trading is done through the NASDAQ, which uses ECNs and other firms with access to the NASDAQ to facilitate trading.
One of the foremost and most prominent exchanges for investing in the stock market is the New York Stock Exchange (NYSE). It is also is one of the largest stock market exchanges in the world. The NYSE is operated by the not-for-profit corporation New York Stock Exchange, Inc, with its main building located at 18 Broad Street, at the corner of Wall Street, in New York City, New York, U.S.A. It is home to some 2,800 companies whose stock is valued at nearly $15 trillion in global market capitalization. Investing your money on NYSE, unlike those on some other more "virtual" exchanges (e.g. NASDAQ), always involve face-to-face communication in a particular physical location. There is a podium/desk on the trading floor for each of the members of the stock exchange. Exchange members interested in buying and selling a particular stock on behalf of investors meet in a predetermined spot, where a NYSE employee facilitates the stock price negotiations between buyers and sellers.
A different kind of stock market exchange arose in the later part of the 20th century and has changed the landscape of the stock market. NASDAQ, which is an acronym for National Association of Securities Dealers Automated Quotations, is a stock market run by the National Association of Securities Dealers. The Nasdaq National Market consists of over 3000 companies that have a national or international shareholder base, meet stringent financial requirements, and agree to specific corporate governance standards. It began trading on February 8, 1971 as the the world's first electronic stock market. Fueled by the growth of internet stock trading, NASDAQ became the largest American stock exchange by 1999, with over half the companies traded in the United States listed. NASDAQ is made up of the NASDAQ National Market and the NASDAQ SmallCap Market. Although the market is based primarily in the United States, NASDAQ has many aliances worldwide, so that today investing in the stock market is a global activity. NASDAQ allows multiple stock market participants to trade through its electronic communications networks (ECNs) structure . To ensure that in chaotic stock market conditions, those placing small market orders are not ignored NASDAQ created a feature known as The Small Order Execution System (SOES).
Before the advent of the internet, full service stock brokerage firms like Merryl Lynch have dominated the market. As discount brokers embraced the Internet market, full service brokerage firms pretty much ignored what was happening. They didn't feel they were really competing on price. Instead, they felt their differentiating factors were research recommendations and a relationship with a broker. They didn't believe their customers were very concerned about price when investing. In addition, it was tough for them to figure out how to incorporate low-priced Internet services into their business models. Most full service brokers are paid commissions out of the fat transaction fees charged to customers. If they were to provide low-cost trading, how could they provide their brokers with generous compensation? As a result, investors have been running from full service stock brokers into the hands of firms offering cheap Internet trades. This boom in internet-based stock market investing brought many companies to the front, including such big names as E-trade, TDWaterhouse etc.
