Common stock is a form of corporate equity

ownership, a type of security. It is called "common" to

distinguish it from preferred stock. In the event of
bankruptcy, common stock investors receive their
funds after preferred stock holders, bondholders,
creditors, etc. On the other hand, common shares on
average perform better than preferred shares or bonds
over time
Common stock is usually voting shares, though not
always. Holders of common stock are able to influence
the corporation through votes on establishing
corporate objectives and policy, stock splits, and
electing the company's board of directors. Some
holders of common stock also receive preemptive
rights, which enable them to retain their proportional
ownership in a company should it issue another stock
offering.
There is no fixed dividend paid out to common stock
holders and so their returns are uncertain, contingent
on earnings, company reinvestment, efficiency of the
market to value and sell stock
A stock exchange is an entity that provides "trading"
facilities for stock brokers and traders, to trade stocks,
bonds, and other securities.
Stock exchanges also provide facilities for issue and
redemption of securities and other financial
instruments, and capital events including the payment
of income and dividends.
Securities traded on a stock
exchange include shares
issued by companies, unit
trusts, derivatives, pooled
investment products and
bonds.
A security traded in some context other than on a
formal exchange such as the NYSE, TSX, AMEX, etc.
The phrase "over-the-counter" can be used to refer to
stocks that trade via a dealer network as opposed to on
a centralized exchange.
It also refers to debt securities and other financial
instruments such as derivatives, which are traded
through a dealer network.
Over-the-counter (OTC) or off-exchange trading is to
trade financial instruments such as stocks, bonds,
commodities or derivatives directly between two
parties. It is contrasted with exchange trading, which
occurs via facilities constructed for the purpose of
trading, such as futures exchanges or stock exchanges.
The New York Stock Exchange (NYSE) is a stock
exchange located at 11 Wall Street in lower Manhattan,
New York City, USA. It is the world's largest stock
exchange by market capitalization of its listed
companies at US$ 11.92 trillion as of Aug 2010. Average
daily trading value was approximately US$ 153 billion
in 2008.

The origin of the NYSE can be traced to May 17, 1792,
when the Buttonwood Agreement was signed by 24
stock brokers outside of 68 Wall Street in New York
under a buttonwood tree on Wall Street. On March 8,
1817, the organization drafted a constitution and
renamed itself the "New York Stock & Exchange Board."
Anthony Stockholm was elected the Exchange's first
president.
The NASDAQ Stock Market, also known as the
NASDAQ, is an American stock exchange . "NASDAQ"
originally stood for "National Association of Securities
Dealers Automated Quotations Systems," but the
exchange's official stance is that the acronym is
obsolete. It is the largest electronic screen-based
equity securities trading market in the United States
and fourth largest by market capitalization in the
world.
With 2919 ticker symbols , it has more trading volume
than any other electronic stock exchange in the world.
It was founded in 1971 by the National Association of
Securities Dealers (NASD), who divested themselves of
it in a series of sales in 2000 and 2001. It is owned and
operated by the NASDAQ OMX Group , the stock of
which was listed on its own stock exchange beginning
July 2, 2002, under the ticker symbol NASDAQ
Whenever someone talks about the stock market as a
place where equities are exchanged between buyers
and sellers, the first thing that comes to mind is either
the New York Stock Exchange (NYSE) or Nasdaq, and
there's no debate over why.
These two exchanges account for the trading of a
major portion of equities in North America and
worldwide. At the same time, however, the NYSE and
Nasdaq are very different in the way they operate and
in the types of equities traded therein
Knowing these differences will help you better
understand the function of a stock exchange and the
mechanics behind the buying and selling of stocks.
The location of an exchange refers not so much to its
street address but the "place" where its transactions
take place. On the NYSE, all trades occur in a physical
place, on the trading floor in New York City. So, when
you see those guys waving their hands on TV or
ringing a bell before opening the exchange, you are
seeing the people through whom stocks are transacted
on the NYSE.
The Nasdaq, on the other hand, is located not on a
physical trading floor but on a telecommunications
network. People are not on a floor of the exchange
matching buy and sell orders on behalf of investors.
Instead, trading takes place directly between investors
and their buyers or sellers, who are the market makers
through an elaborate system of companies
electronically connected to one another.
The fundamental difference between the NYSE and
Nasdaq is in the way securities on the exchanges are
transacted between buyers and sellers.
The Nasdaq is a dealer's market, wherein market
participants are not buying from and selling to one
another directly but through a dealer, which, in the
case of the Nasdaq, is a market maker



The NYSE is an auction market , wherein individuals
are typically buying and selling between one another
and there is an auction occurring; that is, the highest
bidding price will be matched with the lowest asking
price.
Each stock market has its own traffic control police
officer. Just as a broken traffic light needs a person to
control the flow of cars, each exchange requires people
who are at the "intersection" where buyers and sellers
"meet", or place their orders. The traffic controllers of
both exchanges deal with specific traffic problems and,
in turn, make it possible for their markets to work.
On the Nasdaq, the traffic controller is
known as the market maker, who, we already
mentioned, transacts with buyers and sellers
to keep the flow of trading going.
On the NYSE, the exchange traffic controller
is known as the specialist, who is in charge
of matching up buyers and sellers.

The definitions of the role of the market maker and
that of the specialist are technically different; a market
maker creates a market for a security, whereas a
specialist merely facilitates it.
However, the duty of both the market maker and
specialist is to ensure smooth and orderly markets for
clients. If too many orders get backed up, the traffic
controllers of the exchanges will work to match the
bidders with the askers to ensure the completion of as
many orders as possible. If there is nobody willing to
buy or sell, the market makers of the Nasdaq and the
specialists of the NYSE will try to see if they can find
buyers and sellers and even buy and sell from their
own inventories
Not much. Both the New York Stock Exchange (NYSE)
specialist and the Nasdaq market maker try to increase
the liquidity on their respective exchanges and provide
more fluid and efficient trading.
A specialist is a dealer representing a NYSE specialist
firm - one of the main facilitators of trade on the
exchange. A market maker is a broker-dealer who
facilitates the trading of shares by posting bid and ask
prices along with maintaining an inventory of shares. It
is important to note that a specialist is a type of market
maker. The NYSE has seven specialist firms while the
Nasdaq has nearly 300 market makers. The NYSE is an
auction-based market where traders meet on the floor of
the exchange, using person-to-person, telephone
orders or electronic orders. The Nasdaq, on the other
hand, is strictly an electronic exchange.
NYSE
Specialists working on the NYSE have four roles to
fulfill in order to ensure a fair and orderly market:
1.Auctioneer
2. Agent
3. Catalyst
4. Principal
Nasdaq
Market makers working on the Nasdaq exchange are
not actually at the exchange. They are large investment
companies that buy and sell securities through an
electronic network. These market makers maintain
inventories and buy and sell stocks from their
inventories to individual customers and other dealers.

One thing that we can't quantify but must
acknowledge is the way in which the companies on
each of these exchanges are generally perceived by
investors
The Nasdaq is typically known as a high-tech market,
attracting many of the firms dealing with the internet
or electronics. Accordingly, the stocks on this exchange
are considered to be more volatile and growth
oriented.

On the other hand, the companies on NYSE are
perceived to be more well established. Its listings include
many of the blue chip firms and industrials that were
around before our parents, and its stocks are considered
to be more stable and established.
Whether a stock trades on the Nasdaq or the NYSE is
not necessarily a critical factor for investors when they
are deciding on stocks to invest in. However, because
both exchanges are perceived differently, the decision
to list on a particular exchange is an important one for
many companies.
A company's decision to list on a particular exchange is
affected also by the listing costs and requirements set
by each individual exchange. The entry fee a company
can expect to pay on the NYSE is up to $250,000 while
on the Nasdaq, it is only $50,000-$75,000.


Yearly listing fees are also a big factor: on the NYSE,
they based on the number of shares of a listed security,
and are capped at $500,000, while the Nasdaq fees
come in at around $27,500. So we can understand why
the growth-type stocks (companies with less initial
capital) would be found on the Nasdaq exchange



Prior to March 8, 2006, the final major difference
between these two exchanges was their type of
ownership: the Nasdaq exchange was listed as a
publicly-traded corporation, while the NYSE was
private.
his all changed in March 2006 when the NYSE went
public after being a not-for-profit exchange for nearly
214 years
Most of the time, we think of the Nasdaq and NYSE as
markets or exchanges, but these entities are both
actual businesses providing a service to earn a profit
for shareholders. The shares of these exchanges, like
those of any public company, can be bought and sold
by investors on an exchange.
As publicly traded companies, the Nasdaq and the
NYSE must follow the standard filing requirements set
out by the Securities and Exchange Commission. Now
that the NYSE has become a publicly traded
corporation, the differences between these two
exchanges are starting to decrease, but the remaining
differences should not affect how they function as
marketplaces for equity traders and investors.
Third market in finance, refers to the trading of
exchange-listed securities in the over-the-counter
(OTC) market. These trades allow institutional
investors to trade blocks of securities directly, rather
than through an exchange, providing liquidity and
anonymity to buyers.
Fourth market trading is direct institution-to-
institution trading without using the service of broker-
dealers. It is impossible to estimate the volume of
fourth market activity because trades are not subject to
reporting requirements. Studies have suggested that
several million shares are traded per day.


An electronic system that attempts to
eliminate the role of a third party in the
execution of orders entered by an
exchange market maker or an over-the-
counter market maker, and permits
such orders to be entirely or partly
executed.
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