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The US stock markets · lesson 2 of 20

The exchanges: NYSE and Nasdaq

In the United States shares are traded mainly on two exchanges. The New York Stock Exchange, or NYSE, grew out of an agreement among brokers in 1792. Nasdaq was founded in 1971 as the first fully electronic stock market.

A company chooses where to list and must meet the exchange's requirements: minimum size, number of shareholders, corporate governance rules. Each security is identified by a short code called a ticker.

Today almost all trading takes place electronically, including on the NYSE. An order can be executed on several different trading venues, and the rules require brokers to seek the best execution for the client.

Questions

1. Which market was founded in 1971 as the first fully electronic stock market?

Nasdaq

Nasdaq introduced electronic trading in 1971.

2. What is a ticker?

The code that identifies a listed security

Every listed security has a short code that identifies it.

3. What must brokers do when they execute an order?

Seek the best execution for the client

The rules require seeking the best terms among the available venues.

Next lesson: Who supervises: SEC and FINRA

Continue from lesson 4

The US stock markets: an online course in 20 short lessons with quizzes and a final certificate, on Unicorn Academy.

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