The stock market is a collective term that covers all the stock exchanges and trades that take place in a region. The stock market of the US has over 10 stock exchanges in the picture. The US stock market, as of July, 2024, has a value of about $55 trillion. Looking back, The Philadelphia Stock Exchange was the first one to be founded in the year 1790. In the next two years, in 1792, the New York Stock Exchange was instituted. Interestingly, the NYSE was situated in the Wall Street and that is how the term “Wall Street” came to figuratively mean the stock market and the investment banking at large.
All the stock exchanges in the US are controlled or rather monitored by the SEC (Security and Exchange Commission) of the US government. The SEC polices the laws relating to fair investment by investors and companies. It issues accurate market information and scam alerts while also verifying that the information shared by the companies are correct and in compliance with the financial laws. It supervises the activities of the investors, brokers and others participating in the market.
Most of the stock exchanges in the US are controlled a few major companies – TMX group, Cboe global markets, IEX group, Miami International Holdings, Nasdaq Inc., Intercontinental Exchange and few others.
Benefits for the company and public
For a company to be listed in the stock market it has to give up its share to the public by listing an IPO (Initial Public Offering). This helps the company in gathering capital and making themselves known among the public apart from their customers. For the public, the stock market provides a relatively safe and cost-effective investment opportunity to increase their savings and is also easy to liquidate as and when required.
Leading Stock Exchanges in the US
Among all the stock exchanges in the US there are only a few major players. Market cap (capitalization) or market value is the net value of all the shares tradable in the exchange.
- New York Stock Exchange
With a market cap of over $25trillion, the NYSE is the largest exchange in the US and in fact, in the world as well. Founded in 1792, the NYSE has acquired by Intercontinental Exchange (ICE) in 2013. Headquartered in New York, the NYSE lists over 2800 companies and hold the stocks of more than 70 of the largest global corporates.
For a company to be listed in NYSE, it needs to have upwards of 1.1 million shares held publicly. Though most of the trades are carried out electronically, the NYSE still conducts about 20% of its trades on its trade floor and hence retains the nickname “Big Board).
- Nasdaq (National Association of Securities Dealers Automatic Quotation System)
Established in 1971, it is the second largest exchange in the US and in the world. The NASDAQ is worth $21.7 trillion. Being the first electronic exchange in the world, the Nasdaq Stock Market is owned by Nasdaq Inc. The Nasdaq Inc. has also acquired several other exchanges under it – the Philadelphia Stock Exchange (PHLX), the Boston Stock Exchange (BX), the International Securities Exchange (ISE), ISE Gemini (GEMX), ISE Mercury (MRX).
Listing more than 3300 companies, it focuses primarily on the tech giants. It has a more contemporary system that is completely computerized that aid sin keeping its analytics transparent, providing a real-time albeit theoretical pricing of shares and a superior risk management tool all the while collecting a lower listing fee.
Additional Exchanges in the US and their market caps –
- NYSE Chicago (CHX) – $92.52 billion
- Boston Stock Exchange (BSE) – $122.97 billion
- Cboe Options Exchange (CBOE) – $22.36 billion
- International Securities Exchange (ISE) – $93.47 billion
- National Stock Exchange (NSX) – $8.24 million
