What are the differences between AMEX and Nasdaq?

While similar in purpose, the American Stock Exchange (AMEX) and the National Association of Securities Dealers Automated Quotations (Nasdaq) are also unique from one another. The AMEX is the third-largest stock exchange by trading volume in the United States. In 2008, AMEX was acquired by NYSE Euronext. The Nasdaq is another American stock exchange, also located in New York City. Nasdaq holds a higher trading volume per day than any other stock exchange in the world. Both the Nasdaq and the AMEX provide a platform for exchange where buyers and sellers meet. However, there are several differences between these two exchanges.

The Nasdaq is significantly larger than the AMEX, as noted previously. Another key difference is the method of exchange: The AMEX is auction-based, which means that the specialists are physically present at the exchange and the buying and selling of stocks is done verbally. The Nasdaq, on the other hand, is a market-maker based exchange and is completely electronic meaning specialists are not required to match trades. The two exchanges also differ in their focus. The AMEX includes innovative trades, boasting the second-largest options trading market and it helped pioneer the inclusion of exchange-traded funds. The Nasdaq focuses primarily on technology deals and corporate exchanges. (To read more about specialists and their role on the AMEX read our related article Electronic Trading: The Role of a Specialists.)

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