NASDAQ vs NYSE

Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Difference Between NASDAQ and NYSE

NASDAQ stands for National Association of Securities Dealers Automated Quotations exchange which is the exchange that allows investors to buy as well as sell the stock and also provides a key index that indicates the performance of the stock market. In contrast, NYSE stands for New York Stock Exchange, located in New York. It is the world’s largest stock exchange based on 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?

The most famous companies in America and other major companies worldwide list on these two stock exchanges. The sheer quantity of shares traded and the money involved are quite overwhelming.

NASDAQ-vs-NYSE

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Although both are stock exchanges, the ways they work are different.

NASDAQ vs. NYSE Infographics

Let us see the top differences between NASDAQ vs. NYSE.

NASDAQ vs NYSE-info-new

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Key Differences

  • One of the critical differences is in the type of market. In NASDAQ, trading shares/stocks perform through a dealer called a “market maker” that creates a security market. 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. As a result, 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 listed in NASDAQ are usually technology-based upcoming companies with massive potential for growth. On the other hand, the companies listed on the NYSE are traditionally long-lasting companies with huge turnovers and rich legacies.
  • The types of shares traded in NASDAQ are more volatile, whereas the ones sold in NYSE are stable and well established.
  • The cost of listing a company on NASDAQ is very low compared to NYSE. Hence, you could find more new companies listed on 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 have very good growth potential.Shares that are stable and well established.
Nature of tradingTelecommunications.Physical.
Costs involvedEntry: $50,000 to $75,000.

Yearly Fees: $27,500

Entry: $500,000.

Yearly Fees: 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

Although both are in the stock exchange business, there are many differences in their function, the type of companies they attract, the costs involved, etc.

There are also listing requirements that each company should meet to list on stock exchanges. Again, the differences might not affect the stock we will trade, but knowing how each exchange works is essential to making well-informed decisions.

Recommended Articles

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

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Comments

  1. Mark says

    Superb, thank you

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