Let's take a little time to discuss who the major exchanges
are and the
basic way a trade is handled. There are some regional exchanges
that
are fairly well known, but we won't be using them for any
transactions. We
will stay focused on the big-three exchanges.
The New York Stock Exchange (NYSE)is the largest stock exchange
in America. It's located on Wall Street in New York City.
Close to 2000 of the biggest corporations in the United
States have their stock listed on this exchange. These are
the Blue-Bloods of the American business scene.
The American Stock
Exchange (NASD) is next on our list. It's very similar to
the
NYSE as to the manner in which it operates. I would guess
that about 800
to 1000 companies have their stock listed on this exchange
at any given
moment. As of this date the Nasdaq and Amex are talking
about a merger.
Third on the list is the Over-The-Counter Market or OTC.
This association has
more listed securities than any of the others. The OTC association
is a
tight knit group of securities houses located in major cities
all across the
United States.
OTC securities dealers belong to a nonprofit organization
known as the
NASD (National Association of Securities Dealers). They
use a computer
trading system known as NASDAQ, that provides brokers and
dealers
with price quotations for each security traded over the
counter.
The stocks we'll be looking for will be listed on these
three exchanges.
The primary difference between the three exchanges is that
each one
has different listing requirements. Stocks listed on the
NYSE must meet
the strictest requirements, while the ASE and OTC are less
demanding.
Stocks move around from one exchange to another due to the
different
requirements imposed by each exchange. Stocks on the NYSE
get great
visibility, so it's desirable to be listed there. There
are also different rules
on each exchange for raising capital (selling stock state
by state, etc).
