NASDAQ vs NYSE

Difference Between NASDAQ and NYSE

NASDAQ stands for National Association of Securities Dealers Automated Quotations exchange which is the exchange which allows investors to buy as well as sell the stock and also provides key index that indicates the performance of the stock market whereas NYSE stands for New York Stock Exchange which is the stock exchange located at New York and it is the world’s largest stock exchange on the basis of listed securities total market capitalization.

Whenever we talk about stock markets in North America or around the world, the two major giants come to our mind – NASDAQ and NYSE. Why?

It’s because the most famous companies in America and also other major companies around the world are listed in one of these two stock exchanges. The sheer quantity of shares traded and the amount of money involved is quite overwhelming.

NASDAQ-vs-NYSE

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Although both are stock exchanges, the ways both of them work are different.

NASDAQ vs. NYSE Infographics

Let’s see the top differences between NASDAQ vs. NYSE.

NASDAQ-vs-NYSE

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Key Differences

  • One of the critical differences in the type of market. In NASDAQ, trading of shares/stocks is done through a dealer called “Market Maker” that creates a market for the security. But when you want to trade shares/stocks in NYSE, you can buy and sell them to others in the presence of not an NYSE employee that acts as a mediator called a “Specialist.”
  • NASDAQ is where the trading happens electronically. The system matches the prices of buyers and sellers. On the other hand, in the case of NYSE, trading happens physically through the floor brokers when they enter the order into the universal trading platform.
  • Companies that are listed in NASDAQ are usually the technology-based upcoming companies with massive potential for growth. On the other hand, the companies listed in the NYSE are usually the ones that are one of the long-lasting companies with huge turnovers and rich legacies.
  • The types of shares that are traded in NASDAQ are more volatile, whereas the ones traded in NYSE are stable and well established.
  • The cost involved in listing a company in NASDAQ is very low compared to that of NYSE, and hence you could find more new companies listed in NASDAQ.

NASDAQ vs. NYSE Comparative Table

Basis for comparisonNASDAQ NYSE
FoundedIn 1971 by NASDAQ OMX Group.In 1792 when 24 brokers signed the Buttonwood Agreement;
Type of market Dealer’s Market.Auction Market.
Leader inMarket share and volume of share trading.The accrued market capitalization of NYSE’s listed companies;
Nature of shares tradedVolatile shares, having very good growth potential.Shares that are stable and are well established.
Nature of tradingTelecommunications.Physical.
Costs involvedEntry: $50000 to $75000.

Yearly Fees: $27500;

 Entry: $500000.

Yearly Fees: Based on the number of shares listed; capped at $500,000;

Trade indicesThe NASDAQ Composite, NASDAQ Biotechnology, and NASDAQ-100.The Dow Jones Industrial Average, NYSE Equity Indices, and the NYSE Composite.

Final Thoughts

Even though both are in the business of stock exchange, there are a lot of differences in how they function, the type of companies that they attract, the costs involved for the companies, etc.

There are also listing requirements that each company should meet for them to be listed on stock exchanges. The differences might not affect the stock that we are going to trade, but it is essential to know how each stock exchange works so that we could make well-informed decisions.

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This article has been a guide to NASDAQ vs. NYSE. Here we discuss the top differences between NASDAQ and NYSE along with infographics and a comparison table. You may also have a look at the following articles –

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