Financial Management - Essay Example

In order to cope up with this era of efficient and advanced technology NYSE has an advanced computerized system and more than 50% of its trading takes place electronically. (Stock Market Investing Guide) National Association of Securities Dealers Automated Quotations (NASDAQ) dates back its origin to 1790. It became a public company in 1987. It is the first company that sold and offered its own technology to empower other exchanges of the world. NASDAQ is also the first exchange to offer double listing and it has also consolidated the Global Market to great extents.

NASDAQ has improved its technology, trade and business magnificently since last few years. Innovation lies in the roots of the company. They work to collaborate the dreamers with the doers. After a consistent and efficient growth rate since last 10 years NASDAQ now operates in 26 different locations with in 17 countries. To control the functions of such an immense organization scientific technology is a necessity therefore NASDAQ has a completely computerized system where all the trading takes place electronically.

(NASDAQ OMX) Whenever there is a discussion about stock market the two names that strike one’s mind urgently are NASDAQ and NYSE. The two of the biggest plat forms where trading of stocks takes place. Both of these organizations have a major share in worldwide or Global Market. The major similarity between both these organizations is that they deal with the trading that is buying and selling of stocks. These are the platforms where buyers and sellers meet each other and have transactions settled between them.

Another common factor between NASDAQ and NYSE is that both of them are public entities where different companies can get enlisted. (The NYSE And Nasdaq: How They Work). Apart from these factors there is a large difference between the working mechanism and operating system of both the organizations. The basic difference between NASDAQ and NYSE is their “location”. Location here does not refers to an address but instead it’s the place or floor where trading takes place. In NYSE trading takes place on physical floors that is the traders (buyers and sellers) gather on New York trading place and buy or sell the stocks physically by themselves.

Where as in NASDAQ trading of stocks takes place through an electronic medium (telecommunication). People here do not meet each other at some place to make arrangements and decisions about the value and price of their stock but instead investors and buyers or sellers have direct transactions among them through telecommunication. Another difference is that NASDAQ is a dealers market where buyers and sellers do not transact with each other directly but instead there is a dealer who facilitates trade among them.

On the other hand NYSE is an auction market where individuals (buyers and sellers) physically indulge in trading and an auction takes place in which the maximum offered price is matched with the minimum demanded price. In NASDAQ the dealer who is also known as the market maker deals with the problems, flaws and errors that might hinder company’s growth and progress. Whereas, in NYSE there is a person, known as a specialist, who is responsible for taking care of such issues. There is also a difference between the companies which are listed in both the markets.

In NASDAQ there is a higher ratio of technology oriented companies that deal in electronics. However, most of the