American Stock Exchange - AMEX

  

Categories: Investing, Trading

The AMEX is a stock exchange, which is a place where securities can be bought or sold. The AMEX happens to be the third-largest stock exchange in the U.S. and it's a private intentionally non-profit company.

About 15% of all trades in the U.S. are made through the AMEX, and its competitive brethren are NYSE and NASDAQ.

Related or Semi-related Video

Finance: What are the NASDAQ and NYSE?74 Views

00:00

Finance a la Shmoop. What are the NASDAQ and the NYSE? Nasdaq, yeah it stands for

00:09

National Association of Securities Dealers Automated Quotation-systems. And [NASDAQ defined]

00:13

yeah, it feels like they got cheated out of an S in there somewhere, like NASDAQ'S.

00:17

That's what happens when life's on a budget. So NASDAQ is an electronic

00:22

version of the original wall, as in Street, Wall Street, yah that. Where

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well-dressed folks would come with cash in hand scream out a stock and a price [stock market in 1900s]

00:30

and then trade shares. They would trade for whatever was trending at the time. Like

00:34

eyeball massagers, or wooden swimsuits, or motorised surfboards, all real things

00:39

by the way. NASDAQ is the much more modern version of its predecessor NYSE.

00:48

Is anything but nice when you lose money there. NYSE stands for New York

00:50

Stock Exchange and it too was an outgrowth of the well-dressed folks at

00:54

the wall. There are two key structural differences in the two trading systems,

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the NYSE is an actual physical place, has a physical location, address, etc. and this [NYSE Building]

01:04

is what it looks like. NASDAQ is really a concept, a religion, a

01:09

network, it's not really a place. At least not a geographic place. The other big

01:14

difference is the manner in which shares are traded. The NYSE is an auction-based

01:18

system, one individual is a buyer of AMZN at $983.25, he screams electronically

01:24

that number and then buys from whoever is willing to sell at that price.

01:27

Individuals buy from individuals. That's an auction market. But NASDAQ is a

01:32

dealer market, that is somebody deals in the stock. They go out into the market[online stock market]

01:38

and buy say a million shares of whatever.com that was bought in the market

01:41

conveniently for exactly ten bucks even. That dealer now makes a market in that

01:46

stock, ie the dealer is kind of you know, their own individual market. And she

01:50

moves with the market to manage the spread in the trades. Like she might have

01:54

a narrow spread, where she's a buyer of the stock at $10.02 and a seller of the

01:59

stock at $10.07 a share. Or it's a really wild volatile stock, on a wild and [man and woman on rollercoaster]

02:04

volatile day, she might be a buyer only at $9.90 and a seller at $10.30, making 40

02:09

cents a share trade. Well you could do the fancy math that if she

02:13

keeps her inventory steady at a million shares and trades a million shares that

02:17

day. Well with that spread she makes 40 cents times a million or 400 grand for

02:21

the day's efforts. However after staring at a screen all day she's gonna have to

02:24

spend at least some of that money on eye care. [woman in office]

02:26

Thank goodness for those eyeball massagers.

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