The NYSE (the New York Stock Exchange) gives investors a way to buy and sell shares of companies’ stocks that are registered for public trading.
The New York Stock Exchange is open to investors for trading securities from 9:30am to 4:00pm Eastern Time, Monday through Friday. The Exchange is closed for holidays throughout the year, which are stated in advance.
History Of The NYSE
The signing of the Buttonwood Agreement in May of 1792 marked the beginning of the New York Stock Exchange. This agreement was signed by twenty-four stockbrokers under a buttonwood tree outside of 68 Wall Street in New York City.
A constitution was drafted on March 8, 1817, and the market was renamed the New York Stock Exchange Board, with Anthony Stockholm elected as the NYSE’s first president.
A room rented for $200 per month at 40 Wall Street served as the first central location for the Exchange, until a fire destroyed the building in 1835. The NYSE was moved to a temporary location before moving to 10-12 Broad Street in 1865.
As the volume of securities traded on the Exchange increased, the New York Stock Exchange required a larger trading space and a new location, at 18 Broad Street opened on April 22, 1903 at a cost of $4,000,000.
Trading On The New York Stock Exchange
The New York Stock Exchange operates in a nonstop auction format, and shares on the Exchange are traded by stockbrokers on behalf of investors.
These specialist brokers are hired by a New York Stock Exchange member firm, and act as an auctioneer to bring together buyers and sellers in an open outcry auction market setting. These brokers also manage the effective auction. Specialized brokers are not employees of the NYSE.
In 1995, the auction procedure moved toward automation through the utilization of wireless hand held computers. This structure enables traders to accept and carry out orders wirelessly via electronic transmissions.
A Seat On The NYSE
The owners of 1366 “seats” have the right to trade securities on the Exchange directly. The term “seats” is derived from the fact that until 1870 New York Stock Exchange members were seated in chairs for trading. The number of seats has evolved over time, with the number set at 533 seats in 1868, and increased to 1366 in 1953.
A seat on the NYSE is a much sought after commodity due to the fact that they bestow the ability to trade directly on the New York Stock Exchange. The price for a seat on the NYSE has fluctuated over time, with prices rising and falling with the economic climate.
Seats have been sold for as much as $4,000,000 in the late 1990s, and for approximately $1,000,000 in 2001. As the NYSE was set to merge with Archipelago and turn into a publicly traded company, the price for a seat rose to $3.25 million.
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