New York Stock Exchange

The New York Stock Exchange (NYSE) is the world’s largest stock exchange by market capitalisation. Located at the famous New York Stock Exchange building on Wall Street, huge technological advances have enabled the exchange to now trade exclusively electronically. In this guide, we give a brief history of the New York Stock Exchange and explain how you can start trading on the NYSE. We’ve also compiled a list of the top brokers for NYSE trading in 2021.

Top New York Stock Exchange Brokers

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Exinity provides flexible low-cost trading in FX, commodities, indices and equities alongside unique education and support provided by teams located across the world. Now operating in the Middle East, through regulation from the Financial Services Regulatory Authority in Abu Dhabi and the Financial Services Commission of Mauritius, Exinity provides a range of services to traders and investors looking for new opportunities in the financial markets.
Pocket Option is a global binary options broker with sleek proprietary trading platform and competitive range of assets.
Rockfort Markets is a New Zealand broker with a competitive range of assets, trading platforms and market conditions.
IB Boast a huge market share of global trading. With a minimum deposit of $10,000 however, they remain an option for larger traders only.
One of the largest discount brokers in the US, with a fixed trading commission and access to a large array of trading products and securities
Show All Brokers ⇩

What Is The New York Stock Exchange?

Owned by Intercontinental Exchange, the New York Stock Exchange (abbr NYSE) is the world’s largest stock exchange by total trading volume and averages 253 trading days per year. As well as being home to the famous trading floor, prestigious events are also hosted in the NYSE building each year.

A Brief History

The Buttonwood Agreement is thought to be the beginning of the New York Stock Exchange, which 24 brokers signed in 1792 to set a standard commission rate and ensure trading preference was given to other members of the agreement. The first shares traded on the NYSE were the Bank of North America, First Bank of the United States and the Bank of New York. Later, the Open Board of Stock Brokers was launched as a rival to the NYSE, however, the two exchanges merged in 1869.

New York Stock Exchange logo

Increased regulation was introduced following the Great Depression of the 1930s, caused by the crash of the stock market. Over the years, the NYSE trading floor has evolved greatly. In 2020 the New York Stock Exchange became an electronic only trading platform, due to the Coronavirus pandemic. For the first time in history, the trading floors were closed while the market remained open, however, it has since re-opened.

Today, visitors can have live tours of the New York Stock Exchange floor, or view videos of the NYSE trading room on YouTube.

New York Stock Exchange Indices

There are many indices that track the prices of groups of shares on the New York Stock Exchange. Here we list some of the most popular:

  • NYSE COMPOSITE (DJ) – the NYSE Composite includes all common securities that are listed on the New York Stock Exchange. It is capitalisation-weighted, meaning the securities are weighted according to their value. As well as the composite, additional indices exist for industrial, utility, financial and transportation securities.
  • NYSE ARCA TECH 100 – this is a price-weighted index that contains 100 top US technology companies. Although the NYSE maintains the index, it includes securities listed on other exchanges too.
  • DOW JONES INDUSTRIAL AVERAGE – the Dow Jones is formed of the 30 largest companies listed on stock exchanges in the US. It is historically one of the most followed indices, although many believe that it does not provide a good representation of the overall US stock market, especially when compared with other indices such as the S&P 500. The value of the index is the total price of the securities in the index, divided by a factor that is updated whenever a company undergoes a stock split. This ensures the index value is unchanged by the split.
  • S&P 500 – the Standard and Poor’s 500 tracks the 500 largest companies listed on the US stock exchanges. It is also capitalisation-weighted, and one of the most followed US indices.
  • NYSE FANG+ – the NYSE FANG + is an equal-weighted index formed of 10 global tech giants. As the stocks are equally weighted, the portfolio is more diverse. It consistently outperforms many of the other major indices.
  • THE NYSE BITCOIN INDEX – the NYXBT represents the US dollar value of one Bitcoin based on Bitcoin transactions that meet the New York Stock Exchange criteria.

What Is The New York Stock Exchange Used For?

NYSE vs NASDAQ

The NYSE is an auction market which means participants buy and sell directly from each other. This is different to the NASDAQ stock exchange, which is also located in New York City but is a dealer market instead and therefore has designated market makers to maintain liquidity. The NYSE is more focused on industry, unlike NASDAQ which focuses on technology, and therefore tends to have more established, stable stocks. Because of this, some investors consider the NYSE to be a less risky investment opportunity.

NYSE Pillar

NYSE Arca is a subsidiary of the NYSE Group and is an Electronic Communication Network (ECN) that matches orders, unlike the NYSE which is both a physical and electronic stock exchange. NYSE Arca is the leading market for ETFs.

NYSE American (also known as AMEX), is a stock exchange for small to mid-capitalisation companies that traditionally can’t meet the NYSE’s stringent listing requirements.

However, NYSE Pillar is a new integrated trading platform that allows members to access the NYSE, NYSE American Equities, NYSE Arca Equities, NYSE Chicago and NYSE National. NYSE Arca Options and NYSE American Options will also join the platform in 2021 and 2022 respectively. NYSE Pillar will therefore provide a wider selection of stocks; containing all 8000 securities listed on all US stock exchanges. The trading hours remain the same for NYSE Arca, American, Pillar and Options exchanges.

Tapes A, B and C

Tapes A, B and C are used to categorise different types of stocks in the United States:

  • Tape A – NYSE listed stocks
  • Tape B – regional stocks (mostly listed on Arca)
  • Tape C – NASDAQ listed stocks that are also traded on the NYSE

How It Works

Here we discuss some of the key features of the New York Stock Exchange.

Floor Brokers

Identified by their jackets, floor brokers provide information and execute orders for their clients by ‘open outcry’. This is the use of shouting and hand signals to provide information about orders, which takes place on the NYSE trading floor, also known as the trading pit. However, since the 1980s, outcry exchanges have been increasingly replaced by electronic trading platforms on the trading floor – though the floor jobs and dress codes haven’t completely disappeared yet.

NYSE trading platform

Program Trading

Program trading is another phrase for algorithmic, portfolio or basket trading, which is used for high volume transactions and is the way the majority of trading is carried out nowadays. The NYSE defines program trading as buying or selling of 15 or more stocks that have a purchase value of greater than $1 million, and are part of a coordinated NYSE trading strategy. These trades are all captured in a program trading report. However, program trading is thought to contribute to market volatility and is believed to have led to market crashes in the 80s and 90s.

Halts

NYSE halt rules or trading curbs are a mechanism used for market trading suspension if a severe price drop occurs that could eliminate liquidity. These suspended trading period restrictions are known as market-wide circuit breakers (MQCBs), which either temporarily stops trading or closes the market early in extreme cases. NYSE trading market halts are triggered by measuring the decrease of indices. For example, the trading halt rule 80B means that if the Dow Jones Industrial Average falls by more than the set limits in a single trading day, trading will be paused for a defined period of time.

A recent example of this was the Gamestop (GME) trading halt due which was put in place due to extremely high trading volume and volatility.

Reports

The volume summary report contains trading volume charts as well as NYSE trading activity data by parameters including share size and number of trades. These insights are documented on the NYSE trading website, with 2019 and 2020 both presenting records for options trading volume and growth.

Regulation

While the NYSE Regulation (NYSER) is responsible for monitoring trading activities on each market, some regulatory functions are performed by other organisations such as FINRA and SEC, who set trading policy and limits including rules around insider NYSE trading.

Biggest Players

The biggest stocks on the NYSE by USD value are Apple, Microsoft and Alphabet (Google).

The NYSE listings requirements are that a firm should have no less than a volume of 1.1 million shares traded with a market value of over 100 million USD, as well as a minimum trading share price of 4 US Dollars per share. New York Stock Exchange stocks that are trading for under $1 for more than 30 consecutive days are at risk of being removed as a listed company on the stock exchange.

Each listed stock is also represented by unique symbols, for example NYSE: MANU refers to Manchester United and NYSE: WMT refers to Walmart.

Why Trade The New York Stock Exchange?

There are several advantages to trading on the New York Stock Exchange:

  • Liquidity – the NYSE offers almost three times more liquidity than the next largest exchange
  • Price – some of the narrowest bid/ask spreads can be found on the New York Stock Exchange
  • Risk – some investors consider the NYSE to be less risky than NASDAQ, as it is formed of more established companies

How To Start Day Trading On The New York Stock Exchange

Select A Broker

Although traders can visit NYSE.com to track quotes and indices real-time trading prices, it is not possible to trade on the New York Stock Exchange without a valid license. A broker who is a member of the NYSE is therefore required to start trading.

When choosing from the best brokers for NYSE trading, ensure they are regulated and consider any trading fees that may be charged. These are often flat commission fees when trading stocks, which can quickly eat into profits. Other useful features to look for include demo accounts to practice NYSE trading, and apps to trade on the go.

Some brokers may not provide premarket and aftermarket information, however online services such as Yahoo Finance can provide information about after-hours trading quotes.

Pick A NYSE Trading Strategy

One common strategy when trading the New York Stock Exchange is calculating the NYSE tick index trading strategy. This is done by comparing the number of stocks with increasing price versus decreasing price, to get an overall view of whether the market is up or down. For example, if 2500 stocks have an uptick and 300 stocks have a downtick, the overall index would be 2200. Anything above +1000 or below -1000 is considered extreme and therefore a trading signal. This can be visualised in a NYSE trading volume graph:

NYSE price chart

Opening Times

The New York Stock Exchange trading days are Monday to Friday, 9:30 to 16:00 hours NYC time, which is marked by the opening and closing bell. The time difference is four hours with London GMT, meaning the trading window for traders in the UK starts at 13:30. Trading outside these times is also possible – pre-market trading usually opens from 08:00, with after-hours trading beginning at 16:00 (20:00 GMT). However, this schedule is flexible and trading in these times is more volatile. Overnight trading is also possible, with bonds traded from 04:00 to 20:00 hours ET on the NYSE.

In Australia AEST, regular trading is 19:30 to 02:00 hours, while Malaysia and Singapore Standard time is UTC + 8 hours and therefore 17:30 to 00:00. Standard NYSE trading hours are from 15:00 to 21:30 in India.

Though there is no official trading hours lunch break, fewer trades take place over the lunch period in New York, meaning there is less liquidity. Day traders therefore tend to avoid this period.

There is no weekend trading, with the NYSE closed on Saturdays and Sundays. The NYSE also has non-trading days which include Easter Friday, Thanksgiving Day and Memorial Day, though the full calendar for each year (2021, 2022 and 2023) can be found on NYSE.com. However, the NYSE is open for normal trading hours on New Year’s Eve (31st December) and Easter Monday.

NYSE Trading Tips

  • Traders can find the latest NYSE trading updates and news on the NYSE.com website
  • Tutorials on stock market investing and economics are available online, through training companies such as Udemy
  • The NYSE report centre contains regularly issued market statistics, which can be useful for fundamental analysis
  • Online clocks countdown the remaining NYSE trading hours in different time zones such as UTC or Eastern daylight time for traders in the US
  • When putting together a trading strategy, make sure you understand the tax implications of stock trading
  • Keeping an eye on different stocks on the NYSE can be difficult. Set trading alerts through your broker to pick up on important signals
  • API connections can be used to gain access to real-time, low latency NYSE trading data

NYSE trading system

Final Word On NYSE Trading

The NYSE is the largest and most famous stock exchange in the world, allowing traders to buy and sell shares in companies listed for public trading. Its high liquidity and low spreads attract investors from all over the world to trade in some of the largest companies on the planet. Be sure to check out our list of the best brokers for New York Stock Exchange trading here.

FAQs

How Does The New York Stock Exchange Trading Floor Work?

Traders trade securities on behalf of clients by buying and selling at an agreed price. This may be an informal agreement at first, which is communicated to the clearinghouse and the deal is matched.

What Are The New York Stock Exchange Opening And Closing Times?

The NYSE operates from 09:30 to 04:00 UTC time. The NYSE also has extended trading hours, with the early (premarket) trading session start time usually 08:00 UTC, and the late trading session starting after the market closes at 04:00. In the UK, the regular trading hours are 13:30 to 20:00 GMT.

What Is The Difference Between The New York Stock Exchange Vs NASDAQ?

The NYSE is an auction market whereas NASDAQ is a dealer market. NASDAQ does not have a physical trading floor unlike NYSE and was the first all-electronic stock exchange. However, trading hours of operation are the same for both NASDAQ and the New York Stock Exchange.

When Did The New York Stock Exchange Begin?

The New York Stock Exchange is thought to have begun in 1792 as part of the Buttonwood Agreement. The agreement was signed by 24 brokers to set a standard commission rate system and ensure NYSE trading preference was given to other members of the agreement.

How Do I Start Trading On The New York Stock Exchange?

Traders will need to use a broker to start trading on the NYSE. When selecting a broker to open an account with, ensure they are regulated and check for any trading fees charged.

What Are The NYSE Non-Trading Days?

The NYSE non-trading days 2021 are New Years Day, Martin Luther King Jr. Day, Presidents Day, Good Friday, Memorial Day, Independence Day, Labour Day, Thanksgiving and Christmas Day. New Year’s Eve (12/31) has regular NYSE trading hours.

by