The New York Stock Exchange - What is it?

The New York Stock Exchange - What is it?

The New York Stock Exchange is the largest stock market in the world. Millions of dollars worth of stocks, from many significant and valuable companies, are traded on a daily basis.

When the United States of America were newly founded, a small group of people founded the New York Stock Exchange, at its first home at 68 Wall Street. The Button Wood Agreement was signed in 1792, followed by the first trading. The name of the agreement was taken from the button wood trees which were growing nearby. Back then, public meetings were held in places such as coffee houses, and the earliest trading involved just twenty-four stockbrokers.

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These 24 stockbrokers were at that time only allowed to trade with each other, and a commission of 0.25% was charged for each trade; the only stocks traded were bank stocks and government bonds. According to the Button Wood Agreement companies could also be traded, and the first company which was traded on the new stock market was the Bank of New York.

In 1817 the Button Wood Agreement was formalized, and later the New York Stock and Exchange Board was founded as a result. The first president of the board was Anthony Stockholm, and there were thirty stocks traded at that time. The president had the responsibility of naming which stocks members of the board would bid on. There were 533 seats on the board in 1868, compared to 1366 seats today.

The Exchange moved in 1817 from its original location, first to rented accommodation at 40 Wall Street, and then to 11 Wall Street, where it still is today.
Over time the New York Stock Exchanged has changed and developed, in response to the needs of the people who traded on it. In 1867, for example, the first ticker was used, followed in 1878 by the installation of telephones, and in 1966 by the trading floor's electronic displays which we see now.

The New York Stock Exchange is open every day of the year, and has always done so with two exceptions. These were a period of a few days following the beginning of World War I, and following the terrorist attacks on the World Trade Centre in 2001.

In 2005 the New York Stock Exchange purchased a trading group known as Archipelago, through which it acquired a new function as a business operated for profit. Businesses are offered annual licenses, not board seats, which permit them to deal with the Exchange.

These days countries from all parts of the globe, some fifty in number, trade around 3000 stocks via the New York Stock Exchange, the largest stock market in the world.

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