NYSE American vs. the National Association of Securities Dealers Automated Quotations (Nasdaq): An Overview

The NYSE American and the National Association of Securities Dealers Automated Quotations (Nasdaq) are New York-based exchanges, each offering different options for buyers and sellers. NYSE American was formerly known as the American Stock Exchange (AMEX) before it was acquired in 2008.

An interesting note: In 1998 the National Association of Securities Dealers joined forces with the Amex to create the Nasdaq-Amex Market Group. The merger was short-lived and the Amex regained its independence in 2004.

Key Takeaways

  • The Nasdaq and the NYSE American (formerly AMEX) are two ways to trade stocks in the market with different offerings to traders.
  • Nasdaq holds a higher trading volume per day than any other stock exchange in the world.
  • The NYSE American (formerly 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 NYSE American began as AMEX, one of the oldest exchanges in the United States.

NYSE American (formerly AMEX)

In 2008, the AMEX was acquired by NYSE Euronext, the name was changed to NYSE American becoming one of several exchanges owned by the NYSE.

This exchange is one of the largest stock exchanges by trading volume in the United States. It was once the main competitor of the New York Stock Exchange, but now Nasdaq has stepped into that role. This stock exchange's history goes back to New York City in the late 18th century.

The NYSE American includes innovative trades, boasting the second-largest options trading market and it helped pioneer the inclusion of exchange-traded funds. It deals mainly in small- and mid-cap stocks and derivatives. It is a competitively priced exchange and uses electronic Designated Market Makers (e-DMMs) with quoting obligations for each NYSE American-listed company. The company states on its website that it is an "exchange designed for growing companies," and "its 8,000+ NMS securities are traded in a fully electronic manner, including electronic auctions in NYSE American-listed securities."

NYSE American was formerly named AMEX, a company with deep roots and heritage in the New York-based finance industry.

National Association of Securities Dealers Automated Quotations (Nasdaq)

The Nasdaq was created in 1971 by the National Association of Securities Details, which was trying to create an electronic stock market. It had a rocky start, for the example, because when it opened, the Nasdaq wasn't able to execute trades, only automated quotations.

The Nasdaq was successful in OTC trading as the years went on, eventually adding automated trading programs that were able to provide the first stock exchange to offer traders online trading.

The Nasdaq is a market maker-based exchange and is completely electronic, meaning specialists are not required to match trades. The Nasdaq exchange uses automated computer networks to make trades. In addition, the Nasdaq focuses primarily on technology deals, corporate exchanges, and volume reports. To date, the Nasdaq has over 3,800 companies (with trillions of company trades) listed on its exchange.

The Nasdaq isn't just about technology stocks, although it carries big-name tech companies, like Apple and Microsoft, but it also handles consumer goods companies and has health care companies on its roster too.