NYSE American vs. Nasdaq: A Comparative Analysis
Crypto Fundamental Analysis

NYSE American vs. Nasdaq: A Comparative Analysis

Investing
3 Min.

This article compares two major US stock exchanges, NYSE American and Nasdaq, by analyzing their history, trading volume, market focus, and notable listings. While NYSE American appeals to those seeking traditional market stability and focuses on small- and mid-cap stocks, Nasdaq offers electronic trading and diverse listings across various sectors. The choice between the two ultimately depends on an individual's investment goals and risk tolerance.

Basics

NYSE American and Nasdaq, both headquartered in New York, are stock exchanges that offer various options for traders. NYSE American, previously known as the American Stock Exchange (AMEX), was acquired in 2008. A noteworthy historical fact is that in 1998, the National Association of Securities Dealers collaborated with AMEX to form the Nasdaq-Amex Market Group, but this merger was short-lived, and AMEX regained its independence in 2004.

NYSE American

  • NYSE American, previously known as the American Stock Exchange, was acquired by NYSE Euronext in 2008.
  • It is one of the largest stock exchanges in the United States, specializing in small- and mid-cap stocks and derivatives.
  • NYSE American played a pioneering role in the inclusion of exchange-traded funds (ETFs) and boasts the second-largest options trading market.
  • The exchange employs electronic Designated Market Makers (e-DMMs) and offers competitive pricing.
  • NYSE American's trading history dates back to the late 18th century in New York City.
  • It features over 8,000 NMS securities traded electronically.

NASDAQ

  • Nasdaq was established in 1971 with the goal of creating an electronic stock market.
  • Initially faced challenges but later succeeded in OTC trading, becoming the first stock exchange to offer online trading.
  • Nasdaq is entirely electronic, eliminating the need for specialists to match trades.
  • It primarily focuses on technology deals, corporate exchanges, and volume reports.
  • Nasdaq lists over 4,400 companies, including technology giants like Apple and Microsoft, as well as companies from various sectors.

Comparison

Ownership and History

  • NYSE American was acquired by NYSE Euronext in 2008, while Nasdaq was established in 1971 by the National Association of Securities Details.
  • NYSE American has a long history dating back to the late 18th century, whereas Nasdaq is relatively newer.
  • Nasdaq had a rocky start, initially only offering automated quotations, while NYSE American has consistently been a part of the traditional exchange landscape.

Trading Volume

  • NYSE American was once a major competitor of the New York Stock Exchange but now faces competition primarily from Nasdaq.
  • NYSE American is known for its sizeable trading volume and has the second-largest options trading market.
  • Nasdaq has become a significant player in the U.S. stock market, particularly in the technology sector.

Market Focus

  • NYSE American mainly deals with small- and mid-cap stocks and derivatives.
  • Nasdaq has a more diverse focus, including technology, consumer goods, and healthcare companies.
  • Nasdaq's extensive listings encompass a wide range of sectors, making it more versatile in terms of investment options.

Trading Mechanisms

  • NYSE American employs electronic Designated Market Makers (e-DMMs) with quoting obligations for each listed company.
  • Nasdaq relies on automated computer networks for trading, eliminating the need for specialists.
  • Nasdaq's fully electronic trading system offers speed and efficiency.

Notable Listings

  • NYSE American has a historical significance in the New York-based finance industry, with deep roots and heritage.
  • Nasdaq lists renowned technology companies such as Apple and Microsoft, giving it a prominent presence in the tech sector.
  • Nasdaq also includes companies from other sectors, enhancing its diversification.

Conclusion

NYSE American and Nasdaq, both based in New York, offer distinct options for investors. NYSE American, with its rich history and focus on small- and mid-cap stocks, appeals to those seeking traditional market stability. On the other hand, Nasdaq, known for its electronic trading and diverse listings across various sectors, is an attractive choice for investors looking for innovation and a broader range of investment opportunities. The choice between these two exchanges ultimately depends on an individual's investment goals and risk tolerance.

New York Stock Exchange (NYSE)
NASDAQ