Everything You Need To Know About The NYSE

Everything You Need To Know About The NYSE

Every day, millions of investors and traders flock to the market in search of a new millionaire-maker investment. The New York Stock Exchange is the primary destination for investors from around the world to seek out new investments and pledge their capital to a variety of companies; from startups to multinational corporations with over a century of experience.

Some quick facts about the New York Stock Exchange:

   The New York Stock Exchange is the largest and one of the oldest stock exchanges in the world
   The NYSE has a market cap of over $22.5 trillion
   The exchange was founded in 1792 in New York City
   The NYSE is home to the S&P 500 and the Dow Jones Industrial Average indices
   Some notable stocks from the exchange include ExxonMobil, JP Morgan Chase, Boeing, Goldman Sachs, and Coca-Cola - totaling 2,400 listings

The New York Stock Exchange is synonymous with Wall Street, as the physical exchange is located in New York City, with trading floors on 11 Wall Street and 18 Broad Street, which are now National Historic Landmarks.

"What I think of the market is the U.S. markets to the most transparent, offer the most democratized access in the world, they're volatile at times, but they're incredibly efficient and the cost for a retail investor is the lowest it's ever been" - Lynn Martin

If you are curious about the largest stock exchange in the world - this investfox guide to the NYSE is for you. 

10 Facts You Need To Know About The NYSE

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The New York Stock Exchange has a rich and vibrant history, dating back more than two centuries, and has been a cornerstone of the American and global economy ever since.

Here are some facts about the New York Stock Exchange you might not have known:

  1. The NYSE is not the oldest stock exchange in the world. This title goes to the Philadelphia Stock Exchange, which was founded in 1790
  2. The NYSE is owned and operated by the Intercontinental Exchange, Inc, which is listed on the NYSE, under the ticker symbol ICE, and is part of the S&P 500 index
  3. The NYSE works from Monday through Friday from 9:30 am to 4:00 pm Eastern Daylight Time (GMT-04:00)
  4. The NYSE is one of the few exchanges that still have humans on their trading floors, while most other exchanges are automated
  5. The exchange was initially set up on the streets, commonly referred to as the “Curb”
  6. The exchange moved into its current building in 1903
  7. Until 1863, the exchange was called ‘The New York Stock & Exchange Board’
  8. The exchange used to be open to the public - a practice that stopped after the 9/11 attacks
  9. The three biggest crashes in 1987, 2002, and 2008 all happened in October - making the month very unpopular on the trading floor
  10. As of 2017, the NYSE had 205-floor brokers physically present on the exchange 

How Companies Obtain A Listing On The NYSE

In order for companies to qualify for and maintain a listing on the New York Stock Exchange, they must adhere to strict rules enforced by the exchange. The NYSE is a prestigious exchange, which means that companies need to compete in order to acquire a listing there. 

Here is an incomplete list of requirements that companies need to meet in order to list their shares on the NYSE:

  • The company must have at least 400 holders of a minimum of 100 shares each, as well as a minimum monthly trading volume of 100,000 shares for the most recent six months
  • Must have at least 2,200 total shareholders, as well as a minimum monthly trading volume of 100,000 shares for the most recent six months
  • Must have at least 500 shareholders, as well as a minimum trading volume of a million shares for the most recent twelve months
  • Must have at least $200 million in market capitalization (public shares)
  • Must have at least $100 million in pre-tax earnings for the last three fiscal years

These are only a handful of requirements upheld by the NYSE, which offers plenty of flexibility to companies, as most of the requirements are conditional and companies that satisfy some combination of these requirements may still be eligible to obtain a listing category on the exchange. 

How Does The NYSE Make Money?

Another important factor to consider is the way the New York Stock Exchange generates revenue. Generally, stock exchanges make money in several ways, and the NYSE is no different. Some of the NYSE’s revenue streams include:

  • Regulatory and registration fees - the NYSE charges fees for membership, which it generates from brokers and issuers. All market participants contribute to the maintenance and financial health of the exchange
  • Software - the NYSE also provides trading software and extensive real-time market data, which it sells to clients. The primary clients that require massive amounts of data from the exchange are mutual funds and asset managers. The NYSE also offers co-location to institutions, which allows them to place trading computers on NYSE-managed premises for near-instant order execution
  • Governance services - the NYSE also offers a suite of corporate governance and compliance services to its customers

The amount charged by the NYSE can vary, but the general fee structure for a public company looks like this:

  • Initial application fee of $25,000
  • One-time special charge after listing - $50,000
  • Per share fee of $0.004, with a maximum fee of $295,000
  • Minimum $59,500 fee for a single class of common shares (extra $1,050 for every million shares listed)

An average company whose shares are listed on the NYSE pays less than $500,000 per year to the exchange, which is still a considerable amount for smaller companies.

The Dow Jones Industrial Average (DJI)

The Dow Jones Industrial Average index is often used as the measure of market stability, as all 30 constituents are very stable, mature companies with a global outreach. When these companies are not performing well, it is believed to be an indicator of the U.S.’s economic situation, or even the global economy, heading into a recession. Because of this, the DJI is one of the closely-watched equity indices on the market and has been so ever since its inception in 1885. 

What Is The DJI?

The Dow Jones Industrial Average, or the DJI, is one of the oldest and most followed price-weighted indices in the world. The index consists of 30 notable large public companies from various sectors of the U.S. economy, which have an outsized effect on the market. These are companies that employ the highest number of people, generate the most revenue, and are generally considered to be the cornerstones of the American economy.

It must be noted that the members of the index are subject to change and some notable past members include: DowDuPont, ExxonMobil, Pfizer, Raytheon, General Electric, AT&T, etc. 

Another important thing to consider is that the Dow does not consist of only stocks listed on the NYSE as it includes constituents from the NASDAQ as well. 

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Constituents Of The DJI

As already mentioned, the Dow Jones Industrial Average consists of 30 influential large companies in the United States. These companies are:

CompanyTicker SymbolSector% Weight
UnitedHealth GroupUNHHealth care9.52
Goldman SachsGSFinancial services6.60
Home DepotHDHome improvement5.85
McDonald'sMCDFood industry5.45
MicrosoftMSFTInformation technology5.35
CaterpillarCATConstruction and mining4.63
Visa class AVFinancial services4.48
BoeingBAAerospace and defense4.25
Honeywell internationalHONConglomerate3.96
SalesforceCRMInformation technology3.75
American ExpressAXPFinancial services3.36
ChevronCVXPetroleum industry3.30
Johnson & JohnsonJNJPharmaceutical3.15
AppleAAPLInformation technology3.13
Procter & GamblePGConsumer goods2.87
JPMorgan ChaseJPMFinancial services2.76
IBMIBMInformation technology2.55
Nike BNKEClothing2.44
DisneyDISBroadcasting and entertainment1.91
Coca-ColaKOBeverage industry1.23
Cisco SystemsCSCOInformation technology1.01
Verizon CommunicationsVZTelecommunications0.76
Walgreens Boots AllianceWBARetailing0.68
IntelINTCSemiconductor industry0.57

The S&P 500

The S&P 500 is one of the most popular indices on the market. Investors closely track the index and often base their long-term decisions on the projections made according to the performance of the index. This is why the S&P 500 is often considered the benchmark index of the U.S. economy. 

What Is The S&P 500?

The S&P 500 index consists of 503 constituent large-cap equities that represent the bulk of the economic output of the United States. 

The index is administered by the credit rating agency Standard & Poor’s (NYSE:SPGI). 

The index is closely tracked by millions of investors and a number of index funds on a daily basis. The SPDR S&P 500 ETF Trust is the largest exchange-traded fund that tracks the index, with market capitalization coming in at over $350 billion. The total market capitalization of the S&P 500 exceeds $33.8 trillion - making it even larger than the United States GDP.

A common method of evaluating the United States economy is by comparing its size to the market capitalization of the S&P 500. If the index is far ahead, this means that the economy is overvalued and possibly in a bubble. 


S&P 500 Weighting By Sector

As already mentioned above, the S&P 500 is a market capitalization-weighted index that includes 503 constituent large-cap stocks. These are companies that have a well-established customer base and decades of operational history behind them. 

Here is how the S&P 500 is weighted by sector:

Industry% Weight
Information technology28.1
Health care13.3
Consumer discretionary11.8
Consumer staples6.2
Real estate2.6

The index is tilted towards the information technology sector, due to the sheer size of the likes of Alphabet, Apple, Meta, and Microsoft. The weighting of the S&P 500 clearly reflects the interest of investors from around the world in technology and health care, with consumer goods and financial services following behind. 

Key Takeaways From Everything You Need To Know About The NYSE

  • The NYSE is the largest stock exchange in the world and offers 2,400 listings for trading
  • The exchange operates from 09:30 am to 4:00 pm Eastern Daylight Time
  • Companies have to go through a number of rules and regulations to obtain and maintain a listing category on the NYSE
  • The NYSE is home to two of the most followed equity indices in the world - the Dow Jones Industrial Average and the S&P 500
  • The NYSE is one of the few remaining exchanges that still has an active physical trading floor
  • Knowing how major exchanges like the NYSE operate can help beginner investors better understand the market 

FAQs On Everything You Need To Know About The NYSE

Is the NYSE the oldest stock exchange in the world?

No. Contrary to popular belief, the New York Stock Exchange is not the oldest stock exchange in the world. That title goes to the Philadelphia Stock Exchange, which was founded two years prior to the NYSE, in 1790. 

How many stocks are on the NYSE?

Currently, there are 2,400+ stocks listed on the NYSE. These listings include a wide range of stocks, exchange-traded funds, real-estate investment trusts, etc. 

Can I buy NYSE stock?

While anyone can buy stocks listed on the New York Stock Exchange, investors can also buy shares in Intercontinental Exchange, Inc, which owns and operates the NYSE. The operator can be found under the NYSE:ICE ticker.