The Stock Market
To better understand the roles that the NYSE and NASDAQ play in society, one should first understand what are stocks and the stock market. A stock, which is often referred to as a share, is a percentage of ownership in a company. Buying a stock entitles the buyer to revenues, and assets of the company. The more stock a person accumulates the loftier the percentage of ownership is (Brain & Roos, n.d.).
The stocks or shares that a company sells or either issued or traded through exchanges or over-the-counter markets. This venue is called the “stock market”. The stock market is one of the most vivacious parts of the economy (Investopedia, 2012).
The NYSE and NASDAQ are the two most conversant exchanges and both are principal operators for the financial markets and a major provider of innovative trading technologies. Both exchanges postulate trading options for the investors and attempt to match the supply/demand or buyer/seller forum. Both the exchanges also measure the performance of the stock through the use of indexing (Carr, 2011).
The NYSE or New York Stock Exchange is cogitated as an auction market and this particular exchange tends to have a higher listing requirement. The NASDAQ, which was formally known as the National Association of Securities Dealers Automated Quotation, but now is simply listed as Nasdaq, is cogitated as a dealer’s market and has a lower listing requirement.
Another major difference in the two exchanges is the venues in which they operate and the company’s that are listed. The NYSE tends to list company’s, which are deemed more established, and the trading takes place on a physical level in a building. While the Nasdaq, usually List Company’s that are more capricious and the trading is done via computer or over the phone.
President Bush enacted the Public Company Accounting and Investor Protection Act of 2002, also known as The Sarbanes-Oxley Act, on July 30, 2002. The Act was established due to the increasing...