NASDAQ vs NYSE: Difference and Comparison

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.

Key Takeaways

1. The NASDAQ is a dealer-based electronic exchange, while the NYSE is an auction-style exchange with floor traders.
2. NASDAQ-listed companies tend to be technology-focused, while NYSE-listed companies are more diverse.
3. The NASDAQ is known for its faster trading speeds, whereas the NYSE has a more traditional trading environment.

NASDAQ vs NYSE

NASDAQ is an electronic stock exchange where buyers and sellers can trade stocks through a computerized network. NYSE is a physical stock exchange located on Wall Street in New York City. NASDAQ is an electronic exchange, and NYSE is a physical exchange where traders and brokers trade.

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

Parameters of Comparison	NASDAQ	NYSE
Known As	National Association of Securities Dealers Automated Quotations	New York Stock Exchange
Volatility	High	Low
Market Type	Dealer’s market	Auction market
Founded In	1971	1792
Founded By	NASDAQ CMX group	24 brokers with signed Buttonwood Agreement
Located In	Marwah and New York	New York
Capitalization of Market	Less	More
Listed Companies	3800	2400
Listing Fee	Less	More
Traffic Control	Maker of the market	Specialist
Method of Trading	Online or telecommunication	Physical mode
Comprise	NASDAQ 100, NASDAQ Composite, NASDAQ biotechnology	NYSE Composite and NYSE 100
Stock Ticker	NDAQ	ICE
Leader	Market share	Accrued 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 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 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. 

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

Last Updated : 13 July, 2023