Two hundred years ago, the New York stock Exchange, a symbol of the economic power of the United States with a daily turnover of billions of dollars and a combined capitalization of over $ 20 trillion. In the Wall Street office, 60% of all stock transactions on the planet are carried out, and the largest companies list shares on the New York Stock Exchange. How did the history of the exchange begin and what impact does it have on world economy- in the RBC photo gallery.
Featuring Anna Kim
On March 8, 1817, the New York Stock Exchange (NYSE), the world's largest American stock exchange, was founded in the United States. The Dow - Jones industrial index is determined on the stock exchange, along with the NYSE Composite and NYSE ARCA Tech 100 indices, and the global trend for economic growth or decline depends on who holds the initiative.
In the photo: employees receive instructions before the start of the exchange
Formally, the history of the NYSE began in 1792. Then 24 American brokers signed the Buttonwood Agreement, or the "plane tree agreement", according to which they formed an investment company and two rules: to conclude transactions only among themselves and pay a tax of 0.25% from each transaction concluded. The exchange acquired its first securities, trading in them was of a barter nature, and the Tontine Coffee House became the place of regular meetings. After 25 years, it was decided to admit auctioneers to trading and transfer all operations from the coffee shop to the exchange. This is how the New York Stock Exchange was created in the form in which it functions today.
Photo: Express / Archive Photos / Getty Images
At the end of October 1929, there was a stock market crash in the United States. In one day, the Dow-Jones index fell by 11%, a panic sale of shares began in the country, investors, hoping to help out at least some money, sold almost 13 million that day. valuable papers... October 24, 1929 was called Black Thursday, followed by Black Friday, Black Monday and Black Tuesday. The events of October 24-29, known as the Wall Street Crash, caused the The great depression.
Credit: Museum of American Finance / Flickr
NYSE experienced all the consequences of crisis situations in the country, and sometimes was the initiator of them. On August 31, 1914, due to the outbreak of the First World War, the exchange closed for four months, partially resuming its work by the end of November to provide trading in bonds in support of the Entente countries. On December 12, the opening day of trading, the Dow Jones Industrial Average (DJIA) fell 24.4%.
Photo: Police disperse strikers outside the New York Stock Exchange, 1948
Photo: Bettmann / Contributor / Getty Images
On Black Monday, October 19, 1987, the Dow Jones Industrial Average fell by a record 22.6%, affecting the financial industry around the world. In response, the US Securities and Exchange Commission introduced new rules to protect individual investors.
Stock Pricing, ca. 1960-1975 Photo of a woman looking at stock prices as they come out of the quotation machine. Wall of stock quotes behind woman.
(Photo: Museum of American Finance / Flickr)
The NYSE trading session opens at 9:30 am and ends at 4:00 pm New York time. Initially, the signal for the beginning and the end of trading was the sound of a hammer, but since the 1800s it has been replaced by the sound of a bell. As soon as the closing bell rings in each of the four trading halls, trading stops.
(Original Caption) New York: As busy as a beaver once again 9/12 a floorman at the New York Stock Exchange takes orders during record volume day that saw the Dow Jones industrial average rise and fall like a roller coaster.
(Photo: Bettmann / Contributor / Getty Images)
It is believed that the most expensive shares, listed on the New York Stock Exchange, are owned by Warren Buffett's American company Berkshire Hathaway - more than $ 215,000 per share.
The largest IPO in the world is the public offering of shares of the Chinese company Alibaba Group, which operates in the field of Internet commerce, which took place in September 2014.
To pass the listing (a number of procedures for the inclusion of securities in the stock exchange list) of the New York Stock Exchange, you need to meet the minimum indicators: profit for the previous two years - at least $ 3 million, income before taxes for the last year - $ 2.7 million, net worth assets - $ 18 million, the minimum number of shareholders holding one hundred shares or more is at least 2 thousand.
More than 4,000 companies trade daily in the Wall Street office, including American Express, MasterCard, Microsoft, Nike, Johnson & Johnson and Visa. As of December 2016, the capitalization of the NYSE stock market exceeded $ 20 trillion.
In the photo: a Russian dancer on the day of the VimpelCom share placement on the stock exchange, which became the first Russian company to place its shares on the New York Stock Exchange
Today the New York Stock Exchange NYSE is considered the main world trading floor. Not only for America, but for the entire world of finance, it is the greatest and largest exchange.
In the history of its creation, 1792 is considered important, when 24 brokers from New York signed an agreement to create a new stock exchange. This was done in order to be able to limit your commission deductions as much as possible.
Then the NYSE introduces a listing of shares and begins to exchange them on an ongoing basis. In order for the shares to fit NYS & EB, the companies had to comply with the capitalization parameters - this was the new condition on the trading floor.
The NYSE got its full name in 1863 - New York Stock Exchange. The American Stock Exchange today is developing towards absorbing as many other trading floors as possible. Merger is an important factor for the NYSE!
Trading on the NYSE
Trading on the NYSE is a large anthill - participants here practically stand in lines to submit their bids. Companies listed on the New York Stock Exchange are world market leaders - these are the largest and most reputable companies not only from America, but also from around the world.
All stocks are backed by specialists - this is the main feature of NYSE trading. The purchases on the exchange are made thanks to the specialist and the broker of the hall. There are NYSE brokerage houses and independent brokers. Nyse shares are traded in such a way that it is initially done preliminary analysis, so that a person understands what to do in the future with such an action.
Learning to trade on the NYSE stock exchange
Learning to trade on the NYSE takes place in such a way that a trader multiplies not only his profit, but also the company's income. The main principle on which the work of the NYSE is based is to provide timely assistance to the trader, as well as accompany him in all trading operations. Most often, the NYSE resistance / support level quotes turn absolutely not in the direction that is needed, but in the opposite direction.
World or national events, even regardless of the economy, can affect stock prices. The most common way to trade on the NYSE is considered to be investing in securities. The profit or the risk of incurring losses is shared among all clients. This is the only way to instantly get a lot of securities without spending large sums on it.
Trading on the NYSE: pros and cons
The famous world exchange is constantly under the scrutiny of not only famous traders or novice investors, but also a special commission. That is why the NYSE exchange has both pros and cons. Let's consider them in more detail.
Benefits of the New York Stock Exchange.
The New York Stock Exchange is considered the largest in terms of capitalization, because the volume of shares that are on it is more than 60%.
Liquidity - Sell, Buy or Downgrade - any order is executed in less than a second.
A large number of instruments when trading.
Daily update of corporate news.
Among the shortcomings of the leading exchange, the following can be distinguished:
Significant commissions that complicate the task of making a profit.
Difficulties with transferring / withdrawing money, opening your own account.
Large gaps due to the difficulty of trading and carrying overnight positions.
Instant explosive uncontrolled movements, NYSE forecasts change every second.
SDG-trade provides training services for trading in the US stock markets. We recommend to take training, study trading platform on a demo account and only after that proceed to open a real trading account.
What is an abbreviation for New York Stock Exchange- the largest American stock exchange in the world, located in New York. As a symbol of US economic power and home to 60% of all stock transactions on the planet, the NYSE is home to all the ups and downs of the past hundred years.
Whoever takes over the initiative on the NYSE (bulls or bears) determines the global trend for recession or growth in the economy. The work of a trader cannot even be imagined without monitoring this site, since the decisions of New York in 10-12 hours (due to the time difference) are reflected in European and Asian quotes. Many make a start in their activity from it.
This exchange symbolizes the power financial system USA.
At the moment, it is the largest in the world, and its total capitalization is within 28 trillion US dollars. According to the latest data, the NYSE trades assets of 4,000 companies, half of which are American. The organization is owned by IntercontinentalExchange and is regulated by the Securities and Exchange Commission.
NYSE opening hours
The opening and closing of trades takes place at the beginning and at the end of each trading day. The very same operation of the New York Stock Exchange takes place Monday through Friday, from 9:30 am to 4:00 pm ET. Today trading is almost completely automated. The only exceptions are very rare and expensive stocks.
The NYSE is the premier hybrid market today.
For non-US residents, the opening hours of the New York Stock Exchange do not play such a strong role as before, because trades are executed in less than a split second and it takes place in the format of a continuous auction.
Currently, to start trading on the NYSE, investors only need to find a brokerage company that is certified to trade with NYSE... After that, they get online access to the exchange using special software and can freely buy and sell shares of the New York Stock Exchange, either independently or following the advice of a broker.
Short story
On May 17, 1792, 24 brokers who traded like the English in coffee houses signed Buttonwood Agreement (this is the translation of the Buttonwood Agreement - under the plane tree) on the creation of the New York Stock Exchange. The very first securities on the stock exchange were the shares of The Bank of New York.
For the next 25 years, trading on the exchange was declarative and, in many respects, barter in nature. At the same time, the Philadelphia stock exchange developed until messengers from New York went there on a friendly visit - this was in 1817. Upon their return, they made two decisions: on admitting auctioneers (in fact, speculators) to trading and transferring securities trading from the coffee shop to the exchange. And then - the irony of fate.
The fact is that in 1840 a German inventor Samuel Morse patented the telegraph, and it happened in New York. An interesting and useful invention was noticed on Wall Street, and the New York Stock Exchange implemented it in its activities, technically ahead of Philadelphia. The number of players grew rapidly, in 1869 it was decided to restrict traders.
The widespread introduction of the telegraph, which took place at that time, came in very handy. Advances in wireline communications have made it possible to buy and sell assets via the telegraph, taking trade to a whole new level and making the process very flexible and dynamic.
The exchange actively continued its growth until the very beginning of the Civil War, and trading in securities, commodities and gold reached unprecedented proportions.
Not everyone knows that Wall Street hasn't always been America's financial heart. changed its location several times before finally settling in its current location in 1865.
The exchange building is a vivid example of neoclassicism, so in 1978 it was even registered as a historical object.
In 1867 the first ticker of a security was introduced.
In 1878 the exchange received a significant impetus to development. It involves the installation of telephones that give investors direct access to brokers on the exchange. NYSE activity has increased dramatically, and the number of its members has exceeded 1000.
in 1896 saw the light of the stock index, in 1907 there was the world's first economic crisis. In 1934, the site was registered as the National Stock Exchange, in 1965 it maintains its own index NYSE Composite Index(NYA).
Mergers and reorganizations
In 1971, the National Association of Securities Dealers NASDAQ (NASD) founded her own exchange that specialized in electronic trading and eventually became a rival to the NYSE in the United States. The presence of such a competitor forced the exchange to develop actively.
In 2006, NYSE merged with Archipelago Holdings ( ArcaEX), forming NYSE Group, Inc... A few months later, the NYSE Arca electronic exchange was created, and the NYSE Group, Inc. merged with NV, which operates exchanges in France, Belgium, Amsterdam and Portugal to form the first intercontinental stock market.
Following this merger, NYSE Euronext virtually phased out its traditional trading system in favor of electronic commerce. The combined NYSE and Euronext traded under the ticker NYX.
In 2011, NYSE Euronext submitted a purchase request, but this attempt was rejected by European regulators as it would create an absolute monopoly. In 2011, the purchase was banned for the same reason NYSE InterContinental Exchange, American Futures Exchange and NASDAQ OMX Group... In December 2012, NYSE Euronext acquired IntercontinentalExchange, after which NYSE spun off from Euronext.
Interestingly, in 2016 Deutsche Borse is already planning to buy the London Stock Exchange () for $ 30 billion, which makes it a strong rival for the NYSE in Europe. However, despite the new competition, NYSE still remains the largest exchange in the world and in terms of market capitalization exceeds not only its main competitor - NASDAQ, but also the London Stock Exchange combined.
System of work of the NYSE exchange
Today, many ordinary people (mainly due to Hollywood products) have a slightly misconception about the work of the exchange. The “canonical” image of the NYSE in the films is a real bird market, where everything is colorful, bright, noisy and incomprehensible. Today, getting to the exchange (for example, as part of an excursion), the visitor will see an environment that does not differ much from any large office. Brokers lounging imposingly in front of their computers eat, read the press, or gossip with colleagues about this and that. This is due to the fact that the main direction in which the modern New York Stock Exchange operates is online. So the external picture is very deceiving. As the broker leisurely devours his lunch in front of the monitor, colossal amounts of money pass through his accounts.
Scattered throughout the NYSE's operating room are numerous "posts" (small kiosks), each of which has a specific stock assigned to it. In these positions, a specialist (read "auctioneer") conducts a two-way auction between buyers andsellers, creating a market for their shares. Each stock issuer is represented by only one specialist (for example, only one person deals with GE stock). However, each specialist can deal with many different actions.
The trading floor of the exchange itself is characterized by good orderliness, in particular, conducting inspections of the transparency of trading. Additional funds for control are video surveillance and the use of audio listening devices.
Interesting thing. Since 1903, the signal for the beginning and end of trading has been the ringing of the bell, which replaced the sound of the hammer. Despite the fact that trading is actually terminated computer system, the bell will always ring. The honor to hit him went to athletes - Joe Lee Maggio and Michael Phelps, musicians - Snoop Dogg and the bandKiss, politicians - Rudolfo Giuliani, Nelson Mandela, Kofi Annan and Ban Ki-moon. Also on the list of lucky ones are military personnel, rescuers, valiant doctors and fairy-tale heroes - Darth Vader, Mickey Mouse and the Pink Panther.
This exchange is the largest on the planet in terms of market capitalization. It is not for nothing that it is also called the Big Scoreboard. CNBS and other major business channels broadcast the bustling NYSE hall daily. It is located at 11 Wall Street.
Work is carried out daily from Monday to Friday from 17:30 to 00:00 Moscow time or from 9:30 to 16:00 NY.
The main difference between the New York Stock Exchange and other similar platforms is a huge trading toolkit, namely, more than 8 thousand shares at the disposal of brokers.
The main condition for the NYSE's activities is absolute transparency. Everyone sees everyone... That is, at any time, using special applications that are developed specifically for NYSE users (LEVEL-2, Arca book, Nyse open book), you can track the actions of traders, thereby making up an overall picture of the market.
The high degree of control established over the NYSE guarantees security. Not only is the activity of the exchange under strict control financial institutions having the appropriate powers (the US Congress, the Securities and Exchange Commission), is also provided compulsory insurance accounts openedtraders. It should be noted the high level of informatization and mobility of the exchange. In particular, high-speed trading terminals allow you to execute transactions in a record short time in fractions of milliseconds, which for any trader can be decisive in obtaining a positive result of the transaction.
Trading activities and controls
In response to the market crash in October 1987, the NYSE installed a circuit breaker system that launched in October 1988. The essence of its work lies in the temporary suspension of trading, with a sharp drop in prices in a short period of time. The system was developed in accordance with the recommendation of a federal report from the Brady Commission, which stated that rapidly falling prices could increase panic among investors and lead to an avalanche-like market crash.
Another incentive for the implementation of this system was the desire to influence wide price fluctuations. The latter can create uncertainty about order execution, which prompts investors to refrain from trading until the situation stabilizes. The NYSE says that a small pause has a positive effect on trading, as investors have time to assimilate the incoming information and make the most informed and informed choices during periods of high market volatility.
Painting "Floor Of The Nyse" - Kamil Kubik, 2010
Initially, triggers to suspend trading were tied to medium ( drop by about 10, 20 and 30% in 15 minutes). In 2013, the rules were changed and new circuit breaker triggers were installed (7, 13 and 20% in the S&P 500). It was also decided to stop trading altogether for the remainder of the trading session, if during the specified period of time the market drops immediately by 20%.
Since the inception of the circuit breaker system, they have stabilized the work of the exchange several times during periods of stress:
- October 1997... The Dow Jones fell immediately by 7.2% in response to the outbreak of the Asian financial crisis.
- September 2001... After the September 11 attacks in New York, the NYSE was closed for four trading sessions. This is the third time in the history of the exchange that an exchange has been closed for more than one session.
- May 2010... The Dow Jones Industrial Average fell about 10%, the largest intraday percentage decline since 1987.
- 2012 october... There was a two-day break due to Hurricane Sandy.
- July 8, 2015... Trading was stopped due to panic, which erupted after information about a possible cyber attack on the exchange arrived (no evidence of a security breach was subsequently discovered).
It should be noted that the changes made on the NYSE were soon adapted and applied to others, and now some other exchanges around the world are adopting similar control systems.
Organization and licensing
Until 1868, the number of NYSE participants was fixed (533 in total). This limitation was based on the fact that in the first years of the existence of the exchange, the members of the "club" personally participated in the conclusion of transactions, occupying space in the trading floor. 
NYSE participants were able to directly trade shares on the exchange. Because of this privilege, the sites, which originally sold for $ 25, have acquired value over time and become the commodity itself.
For example, in 1928, a listing was sold for $ 625,000 (equivalent to about $ 6 million today). In 1878, the number of seats was fixed at a fixed level of 1,060, although in 1953 it was increased to 1,366.
Everything changed dramatically in 2005 after the NYSE's ownership structure was reformed. Now the exchange is not selling places, but one-year trading licenses. Unlike locations, licenses cannot be resold, but they can be transferred during a change in company ownership.
Assets and shares on the NYSE
Today the NYSE has five regulated markets, including the stock exchange itself, as well as Arca, MKT and Amex Options and NYSE Bonds. They are created so that large, medium and small companies compete “in their weight category” and receive the most favorable conditions for their status. Investors can trade multiple asset classes including stocks, bonds, and options.
NYSE Indices
As for the NYSE index, today the exchange has several of the largest and most influential stock market indices. The largest of them are:
- Dow Jones Industrial Average;
- S & P 500;
- NYSE Composite;
- NYSE US 100 Index.
NYSE listing
The NYSE is currently the world's largest IPO provider. At the top of the list of the most successful companies are the so-called "Blue Chips". Here everyone can see such familiar names as Apple, General Electric, Twitter Inc., Pfizer, P&G and many others.
It should be noted that in order to be listed on the NYSE, companies must have excellent performance and meet a number of criteria.
The largest companies on the NYSE
- 3M Co.(NYSE: MMM) (industrial conglomerate)
- American Express Co.(NYSE: AXP) (credit services)
- AT&T(NYSE: T) (telecommunications)
- Boeing Co., The(NYSE: BA) (Aircraft & Defense)
- Caterpillar, Inc.(NYSE: CAT) (agricultural and construction equipment)
- Cisco Systems(NASDAQ: CSCO) (telecommunications)
- Chevron Corp.(NYSE: CVX) (oil and gas company)
- Coca-Cola Co.(NYSE: KO) (drinks)
- E.I. du Pont de Nemours & Co.(NYSE: DD) (chemistry)
- Exxon Mobil Corp.(NYSE: XOM) (oil and gas company)
- General Electric Co.(NYSE: GE) (industrial conglomerate)
- The Goldman Sachs Group, Inc.(NYSE: GS)
- Home Depot, Inc.(NYSE: HD) (building supplies stores)
- Intel Corp.(NASDAQ: INTC) (semiconductors)
- International Business Machines Corp.(NYSE: IBM) (computing)
- JPMorgan Chase and Co.(NYSE: JPM) (financial group)
- Johnson & Johnson Inc.(NYSE: JNJ) (chemistry, pharmaceuticals)
- McDonald's Corp.(NYSE: MCD) (fast food restaurants)
- Merck & Co., Inc.(NYSE: MRK) (pharmaceuticals)
- Microsoft Corp.(NASDAQ: MSFT) ( software)
- Nike Inc.(NYSE: NKE)
- Pfizer, Inc.(NYSE: PFE) (pharmaceuticals)
- Procter & Gamble Co.(NYSE: PG) (household chemicals)
- Travelers(NYSE: TRV) (insurance)
- UnitedHealth Group Inc(NYSE: UNH) (health)
- United Technologies Corp.(NYSE: UTX) (industrial conglomerate)
- Verizon Communications(NYSE: VZ) (telecommunications)
- Visa, Inc.(NYSE: V)
- Wal-Mart Stores, Inc.(NYSE: WMT) (retail chain)
- Walt Disney Co., The(NYSE: DIS) (entertainment industry)
NYSE, Wall Street, 11
Shares of mainly American companies are traded on the exchange. In addition to them, there are also shares of organizations of non-American origin, in particular, from 53 countries of the world. In total, there are over 1000 of the most liquid stocks. The daily trading volume on the NYSE often reaches $ 3 billion.
It should be noted that the companies whose shares are traded on this exchange are solid enterprises, leaders in their fields. Listing are shares of "", as well as young companies that are developing rapidly. Passing this stage is characterized by confirmation of compliance with the strictest rules, as well as payment of membership fees.
A delisting situation is possible - the board of directors of a company that has lost interest from traders may decide to leave the stock exchange. Shares are withdrawn from trading. The withdrawal of shares is also possible as a result of mergers and acquisitions. During trading, stoppages are possible, which are caused by too fast movement of the share price. Trades are stopped to balance the list of orders and calm the market.
Access to NYSE through Russian brokers
Working with the American stock market is not difficult or problematic for Russian traders as there are brokers providing access to the New York Stock Exchange.
Regulated VFSC and in Russia CROFR... Recommended initial deposit $250-300 .
Owned by a broker who has been in business for over 20 years. The platform itself is under the control of European regulators CySEC and MiFID... Here you will find a huge number of stocks, stock indices, ETF funds and more.
The broker offers a huge asset base, an academy (training programs), constantly conducts webinars, provides analytics and has a very convenient trading platform to which a large number of indicators are connected. The platform itself has a block with latest news and forecasts in Russian. Minimum deposit $200 .
Official site:
Impact of NYSE on the economy
NYSE is one of the first world stock exchanges, and its appearance has significantly influenced not only the American, but also the world economy. This organization accumulates and redistributes enormous financial wealth. In just one hour of its work, amounts that exceed the budgets of many states come into circulation. According to statistics (estimate calculated The World Bank), trading volume on the NYSE in 2016 approached $ 20 trillion, which is about 20% of the gross world product. So the state of the global financial market is inextricably dependent on the work of the New York Stock Exchange.
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I decided to move to New York to trade there from the office of one of the members of the New York Stock Exchange. (...)
I wanted to be close to events.
Edwin Lefebvre "Remembering a stock speculator", 1923
Introduction. Main bell of the New York Stock Exchange
Joe DiMaggio is a baseball player for the New York Yankees and has been named the "Most Valuable Player" in baseball three times.
Michael Phelps is a swimmer, an 18-time Olympic champion and a 26-time world champion.
Members of the rock group "Kiss".
Mayor of New York Rudy Giuliani.
The first black President of South Africa, Nelson Mandela.
UN Secretaries General Kofi Annan and Ban Ki-moon.
American military personnel who have distinguished themselves in operations outside the United States.
Astronauts and charity workers.
The film characters are Mickey Mouse, Darth Vader and The Pink Panther.
What can unite such a "motley company"?
All of them, in different years, pressed the green button on the control panel, which activated the main bell of the New York Stock Exchange. The bell that marks the start (9:30 AM) and the end (4:00 PM EST) of trading on the world's most iconic exchange.
History of the New York Stock Exchange (NYSE)
Buttonwood Agreement, 17.05.1792.
1640s. New Amsterdam (future New York) on Manhattan Island, fenced in by a wooden palisade along its northern border. By 1653, the governor of the American New Netherlands, Peter Stuyvesant, at the behest of the West India Company, strengthened the structure with more powerful fortifications, including the palisade. The wall is 12 feet (about 4 m) high.
In 1685, the townspeople laid a road along the wall. The street gets the logical name Wall Street, Wall Street, "wall street". The British colonialists demolish the fence in 1699. The Wall disappeared, Wall Street remained.
In the late 18th century, among the few attractions on Wall Street in Lower Manhattan were a large plane tree growing right in the middle of the street and The Tontine Coffee House opposite.
Respected people gathered under the plane tree and in the coffee shop - street securities dealers, brokers. Transactions were made right on the pavement, at a table by a plane tree, or over a cup of coffee. It is very convenient and democratic. The contracts were sealed by the signatures of the parties, behind which stood the word of honor of the buyer and seller, the most valuable business asset for those who care about their reputation.
As time went on, the trading volumes grew, the situation had to somehow be put in order. And on a warm spring day on May 17, 1792, 24 Wall Street brokers decided to organize themselves and signed, here, under the sycamore, opposite the house number 68 on Wall Street, the Buttonwood Agreement.
- Brokers (stockists) should only conclude transactions with each other, bypassing the auctioneers.
- The commission rate is 0.25%.
Buttonwood Agreement, 17.05.1792
It is interesting that the business address (business location) of one of the signers, a certain Hugh Smith, who put the second signature on the document, was closest to the table under the plane tree - in the Tontin coffee shop.
The Buttonwood Agreement Association became the first American quasi-exchange, the predecessor of the New York Stock Exchange, the New York Stock Exchange (NYSE).
The first papers on the Buttonwood Agreement were the shares of The Bank of New York, whose office was located nearby, at number 1 on Wall Street (One Wall Street), shares of First Bank of the United States (see below for the bank), and government debt securities, such as "war" bonds during the US Revolutionary War.
Brief Chronicle of the Stock Exchange 1817 - 2013.
March 8, 1817 - the official date of the foundation of the New York Stock Exchange. Its first name is New York Stock and Exchange Board.
Thus, March 8 is a double holiday for stock traders in Manhattan. You can congratulate your colleagues - the fair sex (if they remember International Women's Day) and celebrate the next anniversary of NYSE.
1853 - Listing introduced.
1863 - the stock exchange gets its modern name- New York Stock Exchange, NYSE.
1866 - the number of brokerage houses (places) reaches 533.
1867 - the concept of "ticker" is introduced.
1889 - Customers' Afternoon Letter has grown into the world famous The Wall Street Journal (WSJ), one of the top business dailies in the United States since July 8, 1889.
May 26, 1896 - First publication of the Dow Jones Index, the oldest and most important stock indices NYSE.
1903 - The exchange moves to a building at 18 Broad Street with a neo-Romanesque façade decorated with columns. The official current address of NYSE is 11 Wall St, New York, NY 10005. In 1978, the exchange building complex received the status of a National Historic Landmark.
1914 - from early August to mid-December, the stock exchange closes for 4 months and 2 weeks, due to the outbreak of the First World War. Trading resumes on December 12th.
On October 1, 1934, the NYSE was registered as the national stock exchange by the US Securities and Exchange Commission. The then management of the NYSE is the President and 33 Board members.
1943 - women are allowed to trade in the hall.
1953 - the number of places (offices) is fixed at 1366 (until 2005/06).
1967 - Muriel Siebert becomes the first woman to serve on the NYSE Board.
1977 - foreign brokers start working on the exchange.
September 25, 1995 - NYSE member Michael Einersen transacted 1,000 shares of IBM through electronically filed orders. Thus, a line was drawn under the 203-year-old paper workflow on the New York FB.
2001 - the evaluation of the value of securities in shares of 16 is stopped, a decimal scale is introduced with a step of $ 0.01. After Al Qaeda's attack on the Twin Towers, NYSE does not trade for 4 sessions.
2003 - resumption of the NYSE Composite calculation, 5000 points are taken as the initial value.
2006 - merger with the electronic exchange Archipelago Holdings and creation commercial organization NYSE Group. The group's shares begin trading on the NYSE itself.
2007 - NYSE Group merges with European Euronext. New transatlantic exchange NYSE Euronext is formed.
Consolidation with American Stock Exchange (AMEX). Since 2012 AMEX - NYSE MKT LLC.
2013 - Intercontinental Exchange (ICE) buys NYSE Euronext for $ 8.2 billion. NYSE begins operations as a division of ICE.
NYSE Indices
Any stock exchange must have its own index or indices. The index is the temperature of the trading floor, its pressure and pulse. The New York Stock Exchange has a wide range of such indicators. Below is a brief description of the three.
Dow Jones
When it comes to crashes or rallies in the stock market, usually, by default, they recall the events that took place precisely on the NYSE, all sorts of "Black Mondays or Thursdays" or "the longest" bullish trends ". Of course, unless otherwise stated. The measure of collapse or growth is usually the Dow Jones index.
The Dow Jones Industrial Average (DJIA) is the oldest and most important NYSE index and one of the world's main stock indicators. Dow Jones' author is Charles Henry Dow, an American financial journalist, co-founder of Dow Jones & Company and founder of The Wall Street Journal (WSJ).
The first versions of the index were based on the stock prices of two US industrial and nine railroad companies. The information was purely internal consumption. The Dow Jones Public Index first appeared in the WSJ on 05/26/1896. The basis for the calculation was the average present value of shares of 12 American corporations. Until now, only General Electric has retained its place in the index. Currently, the DJIA includes shares of 30 United States companies. The index is determined in points using the scalable average method, taking into account the consolidation and splitting of securities.
The first Dow Jones value printed is 40.94 points. On January 12, 1906, the index reaches 100. On November 14, 1972, the level of 1000 was crossed. On November 21, 1995, the level of 5000 was passed, and on March 29, 1999 - 10000. The historical intraday high was recorded on May 19, 2015 - 18351.36. In February 2016, the DJIA is trading around 16 thousand points.
the graph is presented on a logarithmic scale
NYSE Composite
The NYSE Composite index has a much finer setting for tracking the situation on the NYSE. Its calculation involves about 2,000 shares of American and non-American companies traded on the New York Stock Exchange with a total capitalization of over $ 20 trillion.
NYSE Composite started on 12/31/1965. On December 31, 2002, the calculation of the index was resumed from the value of 5000 pp. Historical highs were reached at over 11200 points in May 2015. The current range of the index is 9000-9500.
"Tech" index from NYSE. Calculated on the basis of quotes from 100 innovative companies operating in the production of computers, semiconductors, medical and telecommunications equipment, aerospace and defense industries, biotechnology and software development. It has existed since 1982 and is one of the oldest indices in the high-tech sector.
Crashes, landslides and falls on NYSE
From the second half of the 19th century, most of the world's largest stock exchange and financial shocks were necessarily reflected on the New York Stock Exchange or, starting from the last century, directly originated on it.
1792
- the first large recorded financial crisis in USA.
The reason is unrestrained and unlimited lending to speculation land plots... Risky and scandalous real estate transactions have been the “strong point” of American business throughout its history (up to the 2007/08 mortgage crisis), which brought a lot of grief to the world's largest economy.
So, back in 1792, a certain entrepreneur A. Macomb takes a loan from the First Bank of the United States. From 1791 to 1811, this institution served as the national (central) bank of the United States. The purpose of the loan is simply "cosmic" - to buy 1/8 of the entire state of New York, as it were, in bulk, with the subsequent sale of the cut land plots at retail. How do you like the idea and scope? Boldly. But the business did not go, it happens.
The result is no loan repayment. In parallel, a number of stock speculators were already buying up bank shares and American debt securities. The goal is very logical (as for speculators) - to inflate the rate. The same somehow did not work out ...
A series of collapses and non-fulfillment of obligations led in March-April to the depreciation of the American stock market by a quarter. And in May, under the plane tree, 24 brokers signed the Buttonwood Agreement. Quite possibly, this was their answer to the first stock market crash.
1873 - stock exchange panic in Europe: Austria and Germany.
In September, several US railroad banks went bankrupt. The wave of insolvency spread to other industries serving the railway sector. First of all, for metallurgy.
1893 - the collapse of shares, again, of railways and banks.
Major rail carrier Philadelphia & Reading declares insolvency. Fever in the silver market. The American depression of the 1890s began, not yet the Great, but already very painful. About 15 thousand enterprises and 500 financial institutions were ruined. The unemployment rate at the peak of the crisis is 17-19%.
1907 - "Black October # 1" on the NYSE.
The main characters are the Heinze brothers with the United Copper Company, banker John P. Morgan and legendary speculator Jesse Livermore. At the end of 1907, the Dow fell by almost 40% in relation to the close of 1906 - the second worst year in the history of the index. Livermore makes his first million short selling short. Then he will write that he will never forget the day of October 24, 1907, when the stock exchange was at its lowest point of decline.
1929 - "Black October No. 2".
Throughout the 1920s in America, the bull market of stocks was a powerful fountain. Everyone, literally everyone, bought and sold securities, or at least were “in the know”. From shoe shiners and newspaper peddlers to millionaires and politicians. At the end of October 1929, the giant bubble burst. "Black days" on the NYSE - October 24-29 were the beginning of the largest economic crisis in the history of the United States, the American tragedy of the twentieth century - the Great Depression. Only World War II and the iron New Deal of Franklin Delano Roosevelt helped to get out of it.
On the New York Stock Exchange on "Black Tuesday" 10/29/1929, a full-fledged "end of the world" came for brokers. For some, quite literally. Screams of ruin, crush, fights at the racks. Some speculators prayed right in the trading floor, kneeling down. Others rushed into the nearby Church of the Holy Trinity.
Attacks of hopelessness and despair in the financial environment have taken the most extreme forms of expression. Up to suicide. Gas poisoning, headshots, jumping from the top floors of the hotel onto the pavement and off the bridges in the Hudson. In order to avoid a "broker fall", the NYSE administration installed bars on the windows, covering them for a long time with a huge Stars and Stripes flag.
For five "black" October days, the Dow Jones fell by 20%. By 1932, the index had shrunk to 40 points, losing 90% from the level of early September 1929. Brokers, along with other New Yorkers, queued up for free soup and looked for places to sleep on benches in Central Park.
The largest one-day decline in the Ju Jones index - minus 508 points, 22.61%. One of possible reasons- a computer failure caused by software trading and the start of large-scale use of exchange robots. Another version is the unbalanced actions of index arbitrageurs and investment managers to protect their portfolios. Following the results of 19.10.87, the exchange decided to suspend trading in case of sharp market fluctuations.
October 13, 1989- "mini-crash" -89. The Dow fell by 190 points per day (6.91%). Possible market reaction to a $ 6.75 billion deal to be canceled to buy back debts from UAL Corporation, the parent company of United Airlines, which is in bankruptcy.
October 27, 1997- "mini-accident" -97. And again in October. Well, an unlucky month for the American stock market. Back in the 19th century, Mark Twain sarcastically: “October is one of the most dangerous months of the year for gambling. The rest of the dangerous months: July, January, September, April, November, May, March, June, December, August and February. "
The source of the "mini-accident" -97 is the 1997 Asian crisis. The Dow Jones lost 554 points or 7.18% during the day. To stop the dangerous situation, the "switch" rule was introduced - a temporary suspension of trading.
September 15, 2008- The Dow slipped by 504 points (4.62%). Reaction to the largest bankruptcy in US history - the collapse of Lehman Brothers. The exchange prohibits opening short positions in financial sector shares for three weeks. However, until December, the Dow Jones cannot get out of the turbulence zone. September 29 - minus 6.98%, October 9 - minus 7.33%, October 15 - minus 7.87% (again October!), December 1 - minus 7.70%. Ultimately, 2008 was the third-worst year in Dow history, after 1931 and 1907. As a result, the index lost 33.84%.
May 6, 2010- the famous Flash Crash, also known as The Crash of 2:45 or 2010 Flash Crash, occurred. The largest stock indices S & P500, Nasdaq Composite and, of course, the Dow Jones Industrial Average suddenly begin to collapse at 2.32 days and then, after 36 minutes, they are almost completely restored. The fall of the Dow in absolute terms is a record - 998.5 points (9.2%).
The events of 05/06/2010 became the subject of a separate investigation by the regulators - SEQ and CFTC (Commodity Futures Trading Commission, Commodity Futures Trading Commission). In the joint report on the causes of Flash Crash, the actions of cross-market arbitrageurs and high-frequency traders (HFT-traders) - participants and possible culprits of the event - are detailed by the minute.
Interesting facts about the New York Stock Exchange
The New York Stock Exchange is also known as the Big Board.
The total market capitalization of the stock market on the NYSE is $ 19.6 trillion (May 2015). According to this indicator, the NYSE is the largest stock exchange in the world. Average trading volume per session - $ 169 billion (2013). The number of listed companies is about 3000.
On September 16, 1920, at noon, a bomb exploded outside the NYSE building. To be precise, the explosion occurred in front of the entrance to the "Morgan House" at 23 Wall Street. Between 30 and 40 people were killed and about 400 injured.
Anarchists claimed responsibility for the attack. The perpetrators were not found. In 1940, the FBI dropped the case. On the walls of NYSE and JP Morgan (now Deutsche Bank is located there), there are still traces of fragments.
In 1967, members of the Yippie youth radical movement (The Youth International Party) infiltrated the exchange gallery and threw dollars, real and fake, into the trading floor. Some traders booed the trick, and there were those who picked up bills. The Exchange paid additional attention to external security issues. Now it's not easy to get into it from the street. The windows are covered with bulletproof glass.
On October 29 and 30, 2012, the NYSE was closed due to Hurricane Sandy. The previous closure of the stock exchange due to bad weather for two days in a row was back in 1888, on March 12 and 13.
On May 1, 2014, the Securities and Exchange Commission (SEC) fined NYSE $ 4.5 million for violating trading rules.
One of the main characters in the trading floor ("pit") of the exchange is a specialist (specialist broker). He organizes the bidding for this share in the form of a continuous auction. Now, of course, almost everything is computerized, and earlier only notes and loud voices of brokers (and sometimes their elbows) were used in the queue at the counter behind which this very auctioneer stood. The specialist is not a regular employee of the exchange and is hired by a brokerage firm - a member of the NYSE.
You can buy a place on the exchange. It is the same commodity as a stock. And its value rises during economic growth and falls during depressive periods. The maximum price was fixed on the eve of the "black" October 1929 - $ 625 thousand. Adjusted for inflation, today it is over $ 6 million. In the 1990s - 2000s, prices ranged from 1 to 4 million. The youngest buyer of the exchange place was a certain William O'Neill at the age of 30.
Whole dynasties are employed at the NYSE, as at any other enterprise. The most famous is the Barnes family. The Barnes have been members of the exchange for five generations. From Winthrop H. Barnes in 1894 to Derek J. Barnes (2003).
In September 2011, the financial center of New York was covered by a wave of protests under the slogan "Occupy Wall Street", Occupy Wall Street. The protesters blamed the "criminal financial elite" and called for the restructuring of today's "unfair" economy.
The main object near which the fighters against capitalism wanted to hold their rallies by all means was the NYSE building on Wall Street, a symbol of American financial power, huge money and component the big American dream.
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Again, I am glad to welcome you to my blog!
Speaking about the platforms for the turnover of shares, it is impossible to ignore the world's largest stock exchange - NYSE (The New York Stock Exchange). In Russian, its name sounds like the New York Stock Exchange. She is also one of the oldest - she is more than two hundred years old. This is a kind of symbol of American power.
I have no doubt that everyone is interested to know how it all began, what events the exchange went through and how it dealt with difficult times. Let's see!
The structure of this wonderful institution is better represented in the form of a table:
NYSE history
In 1792, 24 brokers decided to unite and signed the so-called Buttonwood Agreement to create the New York Stock Exchange (NSE). This name was purely nominal, since all trade, as before, was carried out in coffee houses. There was not even a dedicated building. Trade was conducted in the old fashioned way, mainly in barter transactions.
The first securities to trade on the NYSE were the shares of the famous The Bank of New York.
In 1817, representatives of The New York Stock Exchange visited their competitor, the Philadelphia Stock Exchange. This visit, by coincidence, marked the beginning of a radical reorganization of the NYSE exchange:
- Trade moved from coffee houses to the exchange building itself.
- Auctioneers were allowed to the trading sessions, that is, in fact, speculators in securities.
- The first constitution appeared.
But the institution really took over the leadership after the invention of the telegraph in 1840. The New York Stock Exchange (NYSE) was the first to apply this useful innovation to trading. This helped to raise the quality and speed of circulation of securities to a new level. The NYSE was rapidly gaining popularity, the number of traders grew like a snowball, and in 1869 they even had to be limited.
The first stock ticker (short designation) appeared in 1867.
Reorganizations and mergers
By the beginning of the XXI century, it became clear that the exchange should grow and strengthen its positions, since all the prerequisites for this exist. Then the management embarked on the path of reorganizations and mergers.
In 2006, following a series of mergers, the NYSE formed the world's first intercontinental stock market. As a result, there was a complete abandonment of traditional work in favor of electronic trading.
Since then, trading has been carried out in a fully automatic mode. An exception is made only for the rarest or very expensive stocks.
NYSE Euronext also tried to take over the German Deutsche Borse, but in Europe they reacted extremely negatively to this intention - no one wants to allow the emergence of a monopolist. However, the NYSE managed to acquire the Intercontinental Exchange in 2012, resulting in the parent exchange being separated from Euronext.
The NYSE currently unites 6 stock exchanges located in 5 countries and 6 derivatives exchanges. financial instruments(such as: futures, options, etc.)
How the NYSE works
Above, I mentioned that trading is now conducted on a completely electronic basis, so its specialists do not have to monitor exchange rates every second and shout out their offers, as we are used to seeing in American films.
Thanks to this system, millions of traders can trade online directly from home. To do this, you only need special software that allows you to trade.
Organization of tenders and licensing
The exchange employs 1,366 people - this number has remained unchanged for over 60 years. Among them:
- Commission brokers - 700 people.
- Brokers in the hall - 225 people.
- Specialists - 400 people.
- Stock brokers - 41 people.
Previously, the places themselves were sold, but now you can buy a license for the right to occupy a particular place on the exchange for a period of one year.
Exchange participants are also traders who trade under the license of their broker.
The main feature of trading on the largest US stock exchange is the absolute transparency of all transactions. With the help of special programs, you can track the history of any action of each bidder. The NYSE is rightfully proud of this undeniable advantage.
Its activities are overseen by the Securities and Exchange Commission.
Features of the trading scheme - crisis limiter
The NYSE did not always do well. Crises in American and World financial markets, as well as the most significant events of a different kind, can unbalance any trading system.
The exchange experienced its first serious shock during the 1907 world economic crisis. Capital outflows have exceeded every conceivable scale.
In 1929 - the famous October "Black Tuesday". The stock market literally collapsed, due to which there were many cases when bankrupt traders took their own lives.
The year 1987 was marked by "Black Monday", when the Dow Jones index showed a phenomenal drop in history - by 22.6%.
After that, it was decided to introduce a so-called switch, which stops all operations on the stock exchange when there is a threat of a strong negative impact on the stock market. This system is fully automatic and is activated when certain conditions are met.
The switch has already tripped in several cases:
- The fall of the Dow Jones in 1997 by more than 7%.
- As a result of a terrorist attack on the United States in 2001.
- 2010 - Dow Jones fell again, this time by 10%.
- Due to a natural disaster - Hurricane Sandy in 2012 (for a period of 2 days).
- Panic over rumors of an impending hacker attack on the NYSE (which have never been confirmed).
The system has shown reliability in preventing stock market crashes and has become an example for other exchanges.
How to get listed on the stock exchange
Not every issuer gets the right to place its securities on this site. The NYSE “makes the weather” on the global stock market, therefore it strictly approaches the selection of candidates.
Anyone who wishes to place assets on the site must comply with the listing - special requirements developed by the NYSE. These include:
- The number of shares in the market.
- Annual profit.
- Minimum two-year income.
- The number of company shareholders holding more than 100 shares at a time.
- The value of the company's assets.
- Trading volume.
At the same time, the exchange accommodates more than 4 thousand issuers (most of them are American stocks). This is 60% of the world's securities turnover. It is not surprising that traders from all over the world are so closely monitoring its indicators.
Pros and cons of NYSE
Like any trading platform, even such a monster has both pros and cons.
The pros are as follows:
- Reliability - long history and high reputation make the NYSE a leader in this area.
- Access to stable and promising securities.
- High level of software - when trading online on this US exchange, trader's orders are executed in a split second, which allows you to confidently predict profit.
- Complete transparency of work.
- To a lesser extent (compared to other sites) it is subject to significant fluctuations in quotations.
- Convenient trading time for European Russia.
But there are also some downsides:
- Perceptible commission fees.
- At times, there are sharp jumps in quotations.
The most famous stocks traded here
If you list even the most top companies that have access to listing on the stock exchange, it will be for a long time. I will only mention that among them there are:
- American Express Co. (AXP) (credit services).
- AT&T (T) (telecommunications).
- Boeing Co., The (BA) (aircraft and defense).
- Caterpillar, Inc. (CAT) (agricultural and construction machinery).
- Cisco Systems (CSCO) (telecommunications).
- Chevron Corp. (CVX) (oil and gas company).
- Coca-Cola Co. (KO) (drinks).
- Exxon Mobil Corp. (XOM) (oil and gas company).
- General Electric Co. (GE) (industrial conglomerate).
- The Goldman Sachs Group, Inc. (GS).
- IBM. (IBM) (computing).
- JPMorgan Chase and Co. (JPM) (financial group).
- Johnson & Johnson Inc. (JNJ) (chemistry, pharmaceuticals).
- McDonald's Corp. (MCD) (fast food restaurants).
- Nike Inc. (NYSE: NKE) Pfizer, Inc. (NYSE: PFE) (pharmaceuticals).
- Procter & Gamble Co. (PG) (household chemicals).
- Verizon Communications (VZ) (telecommunications).
- Visa, Inc. (V).
- Wal-Mart Stores, Inc. (WMT) (trade network).
- Walt Disney Co., The (DIS) (entertainment industry).
How to access trade
In order to work with the NYSE, a trader will need to conclude an agreement with a broker licensed to access this site. It could be like Russian broker and under the jurisdiction of the United States. However, carefully check the authenticity of the license so as not to end up in the hands of scammers, of whom there are especially many around this exchange.
The broker provides software that allows you to access the exchange directly and start trading immediately. Further, it all depends only on your skill.
Many people believe that a huge deposit is needed to trade on the site. However, this is a myth, for work there will be enough start-up capital of 1000-2000 US dollars to open an account with foreign brokers. Some of our brokers will open with 200 $, the only question is what will you do with such a small deposit.
Interactive Brokers CapTrader Exante Just2Trade
In fact, the only real large American broker that still works with Russians.
- There is support in Russian
- Good commissions
- The deposit can be replenished in rubles (past currency control)
By cons I will include:
- Minimum deposit 10.000 $
- Inactivity fee
The company is an American subsidiary of Finam and was created to bring clients from the CIS to the American market.
- The easiest way to open an account
- Russian language support
- Opening an account from $ 200
- Quite high commissions
- Various kinds of additional payments
Caution about Binary Options and Forex
I consider it my duty to clarify some points.
NYSE is a stock exchange. It trades stocks, bonds and options. It has nothing to do with Forex - as you know, only currency is traded on it. And certainly no binary options are used on the global giant, which are nothing other than an electronic casino.
Therefore, I really hope that none of the online scammers, of which there are a great many, to my great regret, will not tempt you with easy winnings and "win-win" strategies. They began very often to hide behind NYSE, as the most popular platform. They even assure that they provide online quotes on the chart, as well as real forecasts of market movements.
Always separate flies from cutlets. Trading is speculation, it is fleeting, and I am not really in the mood to discuss it. Investing is a long-term and reliable strategy. additional income, which is very possible with the help of the NYSE, but only with a planning horizon of 3 years or more.
As the saying goes, "be careful and careful."
Exchange indices
It is here that the main indices are presented, followed by the whole world. The trend depends on them stock markets planets.
Dow Jones Industrial Average (DJIA)
Represents stock quotes of 30 largest US companies. It is the oldest and most significant stock index in America. Shows the state of the United States industry. Calculated in points.
S&P 500
Reflects the state of the American economy as a whole, as it includes 500 companies with the largest capitalization.
NYSE Composite
It is one of the most popular stock exchange indices, a weighted indicator of the value of all stocks traded on it. Includes more than two thousand companies registered both in the United States and abroad. Also belongs to the oldest indexes.
NYSE ARCA Tech 100 Index
A very interesting and equally well-known index reflecting stock quotes of the largest companies - leaders in the field of innovation. It brings together representatives of not only NYSE, but also other American stock exchanges. It includes companies from leading sectors of the economy. Unlike Dow Jones, NYSE ARCA 100 is calculated in US dollars.
NYSE US 100 Index
The indicator includes the 100 largest companies in terms of capitalization, whose securities are traded on the stock exchange.
Investment prospects for these indices
All indexes of the NYSE stock exchange are marked by stable growth for many years. Of course, their history included falls too, but according to the results of the movement of quotations, they are among the most promising world indices.
No wonder Warren Buffett, the undisputed expert in business and investment, who has in his investment portfolio the S & P 500 index, bequeathed to the heirs in no way to sell it, since it can provide them with a comfortable old age.
Therefore, any of them, as well as all in the aggregate, can be recommended for work without a doubt - a reasonable investor will never disdain such promising instruments.