Difference Between NASDAQ and the NYSE

NASDAQ vs the NYSE

NASDAQ and the NYSE have many similarities, but they do operate differently and trade with different types of equities. First of all, NASDAQ stands for National Association of Securities Dealers Automated Quotation, and NYSE is the New York Stock Exchange. These organizations are similar because they are both well known in the trading sector, and offer high-end services. Both are well known for their exchange of equities between buyers and sellers, they are both publicly traded organizations, and both are highly in demand on the stock exchange market. However, the key differences between NASDAQ and the NYSE, lies in their working principles.

NASDAQ’s components are basically electronics, technology and Internet-based companies, and this is the reason why NASDAQ is often determined as a high-tech market. On the contrary, the NYSE comprises of older and more established companies, that are mostly vast industries, and blue chip organizations. Another difference between these two exchanges, is that the NYSE handles its transactions on the basis of physical trading, whereas, NASDAQ stocks are traded on the basis of a telecommunication network. In other words, the NYSE is said to be a typical market where people trade on behalf of their companies, while NASDAQ investors are facilitated with a direct contact system, in order for communication of the sellers and buyers.

The costs required for investors to list their stocks on these two exchanges are also different amounts. The highest cost of investment for a listing on NASDAQ is $1,50,000. There is also an annual fee of $60,000. For the NYSE, the highest fee payable for a listing is $2,50,000, and the yearly fee is around $5,00,000. Therefore, in accordance to these figures, NASDAQ would be the most cost effective for further investment.

Volatility aspects of the NYSE and NASDAQ vary. Volatility refers to the amount of returns one could expect from their investment. High volatility would mean more ‘ups’ and ‘downs’ as far as the security’s price is concerned. A lesser volatility indicates less fluctuation of the security’s price. NASDAQ stocks are considered to have high volatility, and the NYSE has more constant fluctuation within its prices.

Summary:

1.There are more stringent rules for listings on the NYSE.

2.The NYSE has SETS that are sold to traders.

3.The NYSE trades on the basis of double auction.

4.NASDAQ succeeds in the OTC market.

5.NASDAQ is not a physical exchange, and trades are accomplished through an electronic network.

6.NASDAQ consists of market makers, instead of specialists.

7.Unlike the NYSE, NASDAQ is considered to have high volatility.

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