Takeaways
- The NYSE is the world’s largest stock exchange based on the market cap of listed companies.
- The NYSE is owned by ICE (International Exchange Group).
- Trading for the NYSE begins at 9:30 a.m. ET and ends at 4:00 p.m. ET.
- The NYSE has been around for over 230 years.
What is the NYSE?
The New York Stock Exchange, or NYSE, is a stock exchange located in New York City. The exchange lists the stock of thousands of publicly traded companies. The companies with equity listed on the NYSE range from blue-chip companies to high-growth companies, and it is home to companies of various industries ranging from airplane manufacturers to pharmaceutical companies.
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History of the NYSE
The New York Stock Exchange was established in 1792 when a consortium of stockbrokers signed the now famous Buttonwood Agreement. The Buttonwood Agreement was a documented agreement between several dozen stockbrokers and merchants on Wall Street in Lower Manhattan, New York. This agreement sparked a financial community and would later be dubbed colloquially “Wall Street” due to the concentration of financial companies in this area. Because the NYSE was one of the first stock exchanges established in the United States, it enjoyed a head start over its competitors.
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Smart Tip:
The first stock exchange in the United States was the Philadelphia Stock Exchange, founded in 1790, two years ahead of the NYSE.
History of the NYSE
A stock exchange is a place where shares of companies are bought and sold. Companies list their stock on exchanges to raise capital, and equity shares are traded regularly between buyers and sellers. Every stock exchange has different requirements to be listed on their exchange. Listing criteria can range from company headquarter location to a minimum trading volume. It is important to note that stock exchanges do not own shares, but instead, brokers buy and sell shares.
Stock exchanges bring liquidity to a company’s stock. Liquidity means there is a place where holders of a stock can easily sell the stock to another investor. Liquidity is a massive advantage when investing in publicly-traded stocks because it allows investors to freely exchange shares.
Private company stock, on the other hand, is illiquid and cannot be easily bought or sold. Additionally, a private company investor must meet stringent criteria, such as being an accredited investor. Stock exchanges offer a variety of benefits to investors and expand access to investing in stocks.
NYSE Trading Hours
One of the most watched times of the day for investors is when the NYSE bell marks the opening and closing of the trading day. The opening bell rings at 9:30 a.m. ET marking the beginning of trading on the NYSE. The closing bell rings at 4:00 p.m. ET, marking the close of trading.
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Executives of companies listed on the NYSE often come to ring either the opening or closing bell on the stock exchange floor located on Wall Street. Typically, executives come to ring the bell in conjunction with a material company event they are marketing like an investor day, product launch, or anniversary listing.
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When is the NYSE Closed?
Below is a listing of trading holidays for the NYSE:
| Holiday | 2024 |
|---|---|
| New Year’s Day | Monday, January 1 |
| Martin Luther King, Jr. Day | Monday, January 15 |
| Washington's Birthday | Monday, February 19 |
| Good Friday | Friday, March 29 |
| Memorial Day | Monday, May 27 |
| Juneteenth | Wednesday, June 19 |
| Independence Day | Thursday, July 4 |
| Labor Day | Monday, September 2 |
| Thanksgiving Day | Thursday, November 28 |
| Christmas Day | Wednesday, December 25 |
Source: NYSE Website
Smart Summary
If your investing strategy calls for investing in well-established companies with fantastic reputations among investors, then you are probably already investing in companies listed on the NYSE. Retirement planning investment strategies focused on investing for the long-term with investments in the S&P 500 or the DJIA are probably also already invested in companies listed on the NYSE. As one of the most reputable stock exchanges in the world, the NYSE should be part of any investor’s lexicon.
