What Is the New York Stock Exchange (NYSE)?
The New York Stock Exchange (NYSE) is a stock exchange located in New York City that is considered the largest equities-based exchange in the world, based on the total market capitalization of its listed securities. Formerly run as a private organization, the NYSE became a public entity in 2005 following the acquisition of electronic trading exchange Archipelago. In 2007 a merger with Euronext, the largest stock exchange in Europe, led to the creation of NYSE Euronext, which was later acquired by Intercontinental Exchange, the current parent of the New York Stock Exchange.
New York Stock Exchange (NYSE)
How the New York Stock Exchange Works
Located on Wall Street in New York City, the NYSE—also known as the "Big Board"—is made up of 21 rooms that are used to facilitate trading. The main building, located at 18 Broad Street, and the one at 11 Wall Street, were both designated historical landmarks in 1978. The NYSE is the world’s largest stock exchange by market cap, estimated to be $28.5 trillion as of June 30, 2018.
The NYSE relied for many years on floor trading only, using the open outcry system. Many NYSE trades have transitioned to electronic systems, but floor traders are still used to set pricing and deal in high-volume institutional trading.
Currently, the NYSE is open for trading Monday through Friday from 9:30 AM to 4:00 PM ET. The stock exchange is closed on all federal holidays. When federal holidays fall on a Saturday, the NYSE is sometimes closed the preceding Friday. When the federal holiday falls on a Sunday, the NYSE may be closed the following Monday.
- The NYSE, which dates back to 1792, is the largest stock exchange in the world based on the total market capitalization of its listed securities.
- Many of the oldest publicly traded U.S. companies are listed on the Big Board, the nickname for the NYSE.
- The Intercontinental Exchange now owns the NYSE, having purchased the exchange in 2013.
The NYSE’s Opening and Closing Bells
The opening and closing bells of the exchange mark the beginning and end of the trading day. The opening bell is rung at 9:30 AM ET and at 4:00 PM ET the closing bell is rung—closing trading for the day. Each of the four main sections of the NYSE have bells that ring simultaneously when a button is pressed. But trading days did not always begin and end with a bell—the original signal was actually a gavel. During the late 1800s, the NYSE changed the gavel to a gong. The bell became the official signal for the exchange in 1903, when the NYSE moved to 18 Broad Street.
Prior to 1995, the bells were rung by the exchange’s floor managers. But the NYSE began inviting company executives to ring the opening and closing bells on a regular basis, which later became a daily event. The executives are from companies listed on the exchange, who sometimes coordinate their appearances with marketing events, such as the launch of a new product or innovation, or a merger or acquisition. Sometimes, the bells are rung by other public figures, including athletes and celebrities. Some of the more notable figures include singer/actor Liza Minnelli, Olympic medalist Michael Phelps, and the New York Yankees’ Joe DiMaggio. In July 2013, United Nations Secretary Ban Ki-moon rang the closing bell to mark the NYSE joining the U.N. Sustainable Stock Exchanges Initiative.
History of the New York Stock Exchange
The New York Stock Exchange dates back to May 17, 1792. On that day, 24 stockbrokers from New York City signed the Buttonwood Agreement at 68 Wall Street. The New York Stock Exchange kicked off with five securities, which included three government bonds and two bank stocks.
Thanks to the NYSE's head start as the major U.S. stock exchange, many of the oldest publicly traded companies are on the exchange. Con Edison is the longest listed NYSE stock, tracing its roots back to 1824 as New York Gas Light Company. Along with American stocks, foreign-based corporations can also list their shares on the NYSE if they adhere to certain Securities and Exchange Commission (SEC) rules, known as listing standards.
The New York Stock Exchange passed the milestone of 1 million shares traded in a day in 1886. In 1987, 500 million shares were trading hands on the NYSE during a normal business day. By 1997, 1 billion shares were traded daily on the NYSE.
Despite the transition to electronic trading platforms, NYSE floor traders are still used to set pricing and deal in high-volume institutional trading.
A series of mergers has given the New York Stock Exchange its massive size and global presence. The company started as NYSE before adding the American Stock Exchange and merging with the Euronext. NYSE Euronext was purchased in an $11 billion deal by the Intercontinental Exchange (ICE) in 2013. The following year, Euronext emerged from ICE via an initial public offering (IPO), but ICE retained ownership of the NYSE.
Notable Dates in the NYSE’s History
- Oct. 24, 1929: The most devastating stock market crash in the history of the U.S. began on Black Thursday and continued into a sell-off panic on Black Tuesday, Oct. 29. It followed the crash of the London Stock Exchange that took place in September and signaled the onset of the Great Depression, which affected all of the industrialized countries in the West.
- Oct. 1, 1934: The NYSE registered as a national securities exchange with the SEC.
- Oct. 19, 1987: The Dow Jones Industrial Average (DJIA) dropped 508 points, or a loss of 22.6% in a single day.
- Sept. 11, 2001: Trading was shut down for four days at the NYSE following the 9/11 attacks, and resumed on Sept. 17. About $1.4 trillion was lost in the five days of trading following the reopening—the biggest losses in NYSE history.
- Oct. 2008: NYSE Euronext completes the acquisition of the American Stock Exchange for $260 million in stock.
- May 6, 2010: The DJIA suffers its largest intraday drop since the Oct. 19, 1987, crash. It dropped 998 points, called the 2010 Flash Crash.
- Dec. 2012: ICE proposed to buy NYSE Euronext in a stock swap worth $8 billion.
- May 1, 2014: The NYSE was fined $4.5 million by the SEC in order to settle charges of market rule violations.
- May 25, 2018: Stacey Cunningham became the first female president of the NYSE.