Difference Between NASDAQ and NYSE

The stock market is the upcoming interest of many young individuals and some experienced persons. From the past few years, the investments in the market, funds, bonds, etc. have increased more than usual. And this investment is made in the different stock exchange places like – Bombay Stock Exchange, NYSE, NASDAQ, Chicago Board of Exchange, and others. All these markets are different from each other in varied ways.

NASDAQ vs NYSE

The main difference between NASDAQ and NYSE is that the NASDAQ exchange generally focuses on the dealer’s market, and the exchange market is considered to be a stock ticker of NDAQ while comparatively, on another side, the exchange market NYSE focuses on the auction market, and the stock ticker of the exchange is ICE (Intercontinental Exchange).

NASDAQ and NYSE

NASDAQ is the stock exchange market that was founded in the year 1971. The stock exchange is located in Marwah and New York, and the CEO of the stock exchange market is Bob Greifeld. The short form NASDAQ is used in place of National Association of Securities Dealers Automated Quotations. Around 3800 companies have been listed worldwide in the stock exchange market and trades through it.

NYSE or New York Stock Exchange is one of the renowned stock exchange markets in the world. The market was established very early in the year 1792 and is older than NASDAQ. The stock exchange market was opened after the signature of an agreement by 24 different brokers, and the agreement was the ‘Buttonwood Agreement.’ The stock exchange is run by CEO Duncan L. Niederauer.

Comparison Table Between NASDAQ and NYSE

Parameters of ComparisonNASDAQNYSE
Known AsNational Association of Securities Dealers Automated QuotationsNew York Stock Exchange
Volatility HighLow
Market Type Dealer’s marketAuction market
Founded In 19711792
Founded ByNASDAQ CMX group24 brokers with signed Buttonwood Agreement
Located InMarwah and New YorkNew York
Capitalization of MarketLessMore
Listed Companies38002400
Listing FeeLessMore
Traffic ControlMaker of the marketSpecialist
Method of TradingOnline or telecommunicationPhysical mode
CompriseNASDAQ 100, NASDAQ Composite, NASDAQ biotechnologyNYSE Composite and NYSE 100
Stock TickerNDAQICE
LeaderMarket shareAccrued market

What is NASDAQ?

NASDAQ is a stock exchange market existing ever since 1971, and the company is located in New York and Marwah. The company has its floor in a building present in Times Square. The mind behind the company was the NASDAQ CMX group.

The market type followed by the NASDAQ group is the dealer’s market that is any trade of buying or selling of any stock in the market is processed by the third party that is through a dealer. The dealer is the person who will lock down the prices for both buying and selling, and then through the electronic system, the trade is seized.

The volatility experienced in the NASDAQ market is high because of the big companies being part of the market whose prices are volatile. The entering fee taken by the NASDAQ exchange market is quite low, which is why there are about 3800 companies listed under the stock exchange.

What is NYSE?

NYSE is another stock exchange platform that is quite popular and a major marketplace for trading. The stock exchange market was established since the time of 1792 and was founded by signing an agreement between 24 different brokers, and the agreement was the ‘Buttonwood Agreement.’ The stock exchange is located in New York, as the name suggests.

The volatility experienced in the stocks of the NYSE is low because of the presence of shares or stocks of the old enterprise like – Coco-Cola, Walmart, IBM, etc. The listing fees taken by the stock exchange are quite high because of which the listed companies under the stock exchange are about 2400, which is less.

The market type of the exchange is the auction type, and the stocks (buying or selling) are auctioned by the listed company representative and the dealer. The indices of the exchange are – NYSE Composite and NYSE 100. And the trading done in the market is through the physical mode, which may be counted as a drawback for some reason.   

Main Differences Between NASDAQ and NYSE

  1. The short-term NASDAQ stands for the term National Association of Securities Dealers Automated Quotations, whereas comparatively, on the other hand, the short-term NYSE stands for the New York Stock Exchange.
  2. The volatility of the stock market experienced in the NASDAQ is quite high, whereas comparatively, on the other hand, the volatility of the stock experienced in the NYSE is low.
  3. The market type of the NASDAQ stock exchange is dealer type market while comparatively, on the other hand, the market type of NYSE is the auction type market. 
  4. The NASDAQ stock exchange was founded in the year 1971, while comparatively, on the other hand, the NYSE stock market is much older and was founded in 1792.
  5. The founder of the NASDAQ stock exchange is the NASDAQ CMX group, while comparatively, on the other hand, NYSE was created after signing the Buttonwood agreement by 24 brokers. 
  6. The stock market NASDAQ is located in Marwah and New York, whereas comparatively, on the other hand, the stock market NYSE is located in New York, as the name suggests.
  7. Overall market capitalization in the NASDAQ stock market is less while comparatively, on the other hand, the market capitalization for NYSE is much more.
  8. Under the NASDAQ stock market, about 3800 companies have listed themselves while comparatively, on the other hand, the NYSE has almost 2400 companies under their stock exchange.
  9. The entry fee or the listing fee under the NASDAQ stock market is low, while comparatively, on the other hand, the listing or entry fee in the NYSE is hefty for some companies.
  10. NASDAQ often controls the traffic as it is considered to be the maker of the market, while comparatively, on another side, the NYSE is the specialist in controlling the market traffic.
  11. NASDAQ often deals through telecommunication or online, while on another side, NYSE uses the traditional physical mode of trading.
  12. NASDAQ has three different indices – NASDAQ 100, biotechnology, and Composite while, NYSE has two different indices – NYSE 100 and Composite.
  13. The stock ticker of NASDAQ is NDAQ, while the stock ticker for NYSE is ICE.
  14. NASDAQ is said to be the leader of the market share, while NYSE is considered to be the leader of the accrued market. 

Conclusion

To summarize the above discussion, this can be concluded that the increase in demand of investing the money in different ways like – stock market, insurance, mutual funds, bonds, buying new commercial or agricultural properties, new flat or buildings or plot, etc. The new trends of the past few years indicate that youth have a keen interest and curiosity about the working and trading of the stock market.

There are different stock markets, and every individual has their own choice or will to invest in any of them after checking the regulations and norms in their respective countries. Because some countries do not allow trade or exchange in such a manner. Although both NASDAQ and NYSE exchange markets are popular and many old enterprises and companies invest through them.

Surprisingly, NYSE is the old exchange market and has been in existence ever since after 1792. While comparing NASDAQ on this behalf, it is the younger competitor and has been in existence since 1971.

References

  1. https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/article/abs/can-the-treatment-of-limit-orders-reconcile-the-differences-in-trading-costs-between-the-differences-in-trading-costs-between-nyse-and-nasdaq-issues/607DBA2AA9694D6EA4F9085FC17AFBBD
  2. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1475-6803.2004.00096.x
  3. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=185608
  4. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-6261.1997.tb04819.x
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