The NYSE and NASDAQ: How They Differentiate

It has been considered that when people talk about the stock market, they mostly refer to it as Wall Street. Because that is considered the home to the globe’s largest stock exchange, the New York stock exchange.

That is not the only stock exchange in the city, the second-largest one is also there about four miles north that is the first electronic market in the world, NASDAQ. There is no need to debate why these two exchanges are known for the bulk of stock trading in North America and worldwide. There is the difference in both of the market in terms of they operates and the equalities they offer also differ. These differences are the key to have a better understanding of the stock exchange and the mechanics behind buying and selling stocks.

Whenever US-based companies plan to shift from private to public, the main priority is to debut their IPOs on one of these exchanges. There are bell-ringing ceremonies held every day on both NYSE and NASDAQ to qualify the open and close of the market hours.

So, here are the differences you need to know about these two markets.

An Auction Market Or A Dealer Market

It is one of the most important differences between the NASDAQ and New York stock exchange is how buyers and sellers trade securities. NYSE operates and facilitates like an auction market, whereas NASDAQ makes the market for trade as a dealer. Here is more explanation:

Auction Market

Buying and selling are executed by matching the bids submitted by traders at NYSE and other stock exchanges. The highest bid or the amount that is willing to pay by the buyer is matched with the lowest bid price among sellers.

Dealer Market

In NASDAQ, the trade takes place through a dealer rather than between the direct parties of buyer and seller. The dealer is also called a market maker, who arranges the trades on behalf of buyers and sellers. In NASDAQ, all trades are executed electronically in fractions of seconds as the computer acts as the dealer.

Being an investor, you may have not realized the differences in both of the exchange markets either NASDAQ or NYSE. The most common reason is that the goal of these exchanges is to make sure trades can be executed in a seamless and orderly fashion.

More than 200 years of history versus around 50

The New York stock exchange was established in 1792 to give the traders a platform to exchange securities. Currently, the majority of trading is executed electronically mostly, there is still the potential of taking plenty of actions on the trading floor.

NASDAQ was established in 1971 as the first electronic stock market around the globe that means that there are no human executing trades at this exchange market. The method is all done by computers.  The building of NASDAQ has become a prominent fixture in New York’s time square neighborhood.

Therefore, these two markets are taking the major part of the trading of stocks of the world. If you want to have more information on diverse subjects then give a visit to the blog portal of objectual system limited. Find us at

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