Located in New York City, the New York Stock Exchange (NYSE), one of the largest stock exchanges in the world allows stock to be easily bought and sold. There are over 3,200 companies listed on the NYSE. Anyone, through a broker, is able to buy and sell stock efficiently between each other through the NYSE.
The Hybrid Market, which began in January of 2007, has turned everything in the NYSE electronic. Before, everything happened on the floor, but now stocks can be traded electronically. The NYSE is very efficiently set up. Stock brokers have to understand the floor well in order to know where to buy which stock.
In order to trade on the floor, stock brokers must hold one of the 1,366 seats available. These seats are bought and sold similar to stocks. The price goes up and down just like stocks do and are generally very expensive.
When you watch the news during the financial segment, they often tell you how the Dow or the S&P 500 is doing. These are both Stock Market Indexes. The Dow is short for Dow Jones Industrial Average. It includes 30 large companies.
Indexes are often used as a measuring point for how well the market is doing as a whole. The Dow is calculated through a price weighted average. Instead of a simple average, it is calculated by adding together the price of each of the 30 stocks and dividing it by 30 in order to keep it proportional.
The S&P 500 is often considered a better index to look at because it includes 500 stocks and is market value-weighted. They compute the value based upon the market value of the shares outstanding. An example would be if one stock has three times as many stock outstanding, it will be counted three times as much.
Market Value Indexes were created to evaluate the stock market as a whole. By comparing one index from one time to another, they can see if the market has been going up or down and how quickly. You will often see these indexes being stated on financial television channels and during financial segments of the news.
If you don't understand the NYSE and how it works, you'll have trouble when buying and selling stock. Understanding the indexes will also help you when you're doing research. Use them to your advantage.
The Hybrid Market, which began in January of 2007, has turned everything in the NYSE electronic. Before, everything happened on the floor, but now stocks can be traded electronically. The NYSE is very efficiently set up. Stock brokers have to understand the floor well in order to know where to buy which stock.
In order to trade on the floor, stock brokers must hold one of the 1,366 seats available. These seats are bought and sold similar to stocks. The price goes up and down just like stocks do and are generally very expensive.
When you watch the news during the financial segment, they often tell you how the Dow or the S&P 500 is doing. These are both Stock Market Indexes. The Dow is short for Dow Jones Industrial Average. It includes 30 large companies.
Indexes are often used as a measuring point for how well the market is doing as a whole. The Dow is calculated through a price weighted average. Instead of a simple average, it is calculated by adding together the price of each of the 30 stocks and dividing it by 30 in order to keep it proportional.
The S&P 500 is often considered a better index to look at because it includes 500 stocks and is market value-weighted. They compute the value based upon the market value of the shares outstanding. An example would be if one stock has three times as many stock outstanding, it will be counted three times as much.
Market Value Indexes were created to evaluate the stock market as a whole. By comparing one index from one time to another, they can see if the market has been going up or down and how quickly. You will often see these indexes being stated on financial television channels and during financial segments of the news.
If you don't understand the NYSE and how it works, you'll have trouble when buying and selling stock. Understanding the indexes will also help you when you're doing research. Use them to your advantage.
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