What is the NYSE Amex Composite Index?

The NYSE Amex Composite Index is an index of stocks that represent a portion of securities traded on the NYSE Amex exchange. The NYSE Amex Composite Index is a market capitalization-weighted index, so the weight of each stock depends on the price of the shares and how many are outstanding.

While the NYSE Amex no longer exists under that name after several name changes, the index remains named as such as of June 2019.

Key Takeaways

  • The NYSE Amex Composite Index is a market-cap weighted index that represents primarily nano-, micro-, and small-cap stocks.
  • The index reflects the price level and direction of these stocks as a whole and provides traders with a proxy for how this segment of the stock market is doing.
  • The Amex, or now the NYSE American, is an exchange that lists primarily small-cap stocks.

Understanding the NYSE Amex Composite Index

The NYSE Amex Composite Index includes approximately 213 securities (subject to change) traded on the NYSE Amex exchange. Securities range in capitalization from approximately $20 billion to $1.2 million (will fluctuate as stock prices fluctuate).

The NYSE Amex exchange has a long history of trading in the United States and has undergone several ownership changes and rebranding efforts. Listings on the exchange include global companies with small, mid, and large market capitalizations. As of June 2018, the largest companies by capitalization included Imperial Oil, Cheniere Energy, and Seaboard. The smallest companies in the index tend to rotate, as they grow larger or fail.

The symbol for the NYSE Amex Composite Index is XAX.

Since the NYSE Amex Composite Index is mostly composed of mostly nano-, micro-, and small-cap stocks, the index is primarily used as a tool for seeing how small company stock prices are doing overall. During speculative times, investors tend to favor the riskier small-cap names, while at other times investors are more conservative and will favor larger-cap names that are more established.

History of the NYSE Amex

The NYSE Amex exchange is located in New York City. It was founded in 1908 under the name the New York Curb Market Agency. It operated outdoors until 1921 when it moved indoors to 86 Trinity Place. In 1929 it changed its name to the New York Curb Exchange.

It was renamed as the American Stock Exchange (AMEX) in 1953. Since the 1920s, it has been a leading U.S. securities exchange for international listings. By 1971, it was the second largest exchange in the U.S.

Options trading was introduced in the 1970s. In the early 1980s, the trading floor got handheld computers. This was revolutionary at the time.

In 2008, the American Stock Exchange was bought by NYSE Euronext who integrated it with the Alternext European small-cap exchange and renamed it NYSE Alternext U.S. Subsequently, under the ownership of the NYSE Euronext it was rebranded as NYSE Amex Equities, and then changed its name in 2012 once again to NYSE MKT LLC. The exchange underwent one more name change as of 2019, and it is called NYSE American. Many people still call it NYSE AMEX.

The exchange is primarily an equity market exchange for emerging growth companies. It offers a variety of trading advantages on its exchange including electronic designated market makers (e-DMMS), modern execution technology, and advanced trading functionality.

Overall it seeks to offer its trading customers many unique features. One of which is a 350-microsecond delay mechanism which encourages midpoint trading (matching orders between the bid and ask). This mechanism helps to facilitate pegged orders which provide traders with an efficient trading strategy for easily entering and exiting positions. It also boasts a competitive transaction fee structure with transaction costs ranging from zero cents to $0.0005.

NYSE Amex Composite Index vs. S&P 500 Index

The chart below shows a comparison of the price performance of the NYSE Amex Composite Index (price bars) and the S&P 500 index between the 2009 low and June 2019.

NYSE Amex Composite Index Versus S&P 500 Index monthly chart
NYSE Amex Composite Index Versus S&P 500 Index. TradingView.com

Initially, the NYSE Amex Composite Index was stronger rising with greater magnitude than the S&P 500. By 2013 that started to change, showing that investors favored larger-cap stocks and that likely larger-cap stocks were posting stronger numbers than the smaller-cap stocks. This told savvy investors that it was time to focus on large-cap stocks.

Between 2013 and 2019 the NYSE Amex Composite Index moved largely sideways, while the S&P 500 moved higher. Comparing different indexes in this manner can provide insight into which segments of the market are doing better than others.