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LeoGlossary: New York Stock Exchange (NYSE)

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The New York Stock Exchange) (NYSE) is an American stock exchange located in the Financial District of Lower Manhattan in New York City. It is the world's largest stock exchange by market) capitalization. The NYSE is owned by Intercontinental Exchange, an American holding company that it also lists (NYSE: ICE).

The NYSE was founded on May 17, 1792, by 24 stockbrokers who signed the Buttonwood Agreement. The agreement established rules for how stocks could be traded and set fixed commissions. The NYSE originally traded under a buttonwood tree on Wall Street, but it has since moved to several different locations. The current NYSE building was opened in 1903.

The NYSE is a major center for the trading of stocks and other securities. It is also a popular tourist destination, and it is often featured in movies and television shows.

Here are some of the key features of the NYSE:

  • The NYSE is a physical exchange, where stocks are traded on the floor by designated market makers.

  • The NYSE is a continuous auction market, meaning that stocks can be traded at any time during the trading day.

  • The NYSE is a regulated market, meaning that it is subject to oversight by the Securities and Exchange Commission (SEC).

  • The NYSE plays an important role in the global economy. It provides a platform for companies to raise capital and for investors to buy and sell stocks. The NYSE also helps to set the prices of stocks, which can have a ripple effect on other financial markets.

The NYSE is a vital part of the American financial system, and it is one of the most iconic landmarks in the world.

History

The New York Stock Exchange (NYSE) traces its origins to the Buttonwood Agreement, which was signed by 24 stockbrokers on May 17, 1792, under a buttonwood tree on Wall Street. The agreement established rules for how stocks could be traded and set fixed commissions.

The early years of the NYSE were marked by informality and instability. Stocks were traded on the street, and there was no central location for trading. This made it difficult to track prices and to ensure fair trading practices.

In 1817, the NYSE adopted a constitution and became a formal organization. The constitution established rules for trading and created a governing board of directors. The NYSE also moved to a central location at 80 Broad Street.

The NYSE continued to grow throughout the 19th century. In 1865, it acquired the New York Gold)Exchange, which allowed it to trade gold and other commodities. In 1872, the NYSE adopted the ticker tape machine, which allowed traders to track stock prices in real time.

The NYSE played a major role in the financing of American industry in the 19th century. It provided a platform for companies to raise capital and for investors to buy and sell stocks. The NYSE also helped to set the prices of stocks, which made it easier for companies to raise money and to invest in new projects.

The early 20th century was a time of great growth and change for the NYSE. In 1903, the NYSE moved to its current location at 18 Broad Street. The new building was one of the largest and most technologically advanced buildings in the world at the time.

The NYSE also expanded its trading operations in the early 20th century. In 1913, it began trading bonds. In 1926, it began trading options. These expansions made the NYSE a more diversified and comprehensive exchange.

The NYSE played a major role in the financing of World War I and World War II. It provided a platform for the government to raise money and for investors to buy and sell war bonds.

The Market Crash of 1929

In the 1920s, the NYSE experienced a period of rapid growth. The stock market was fueled by speculation and easy credit, and stock prices rose to unsustainable levels. On October 24, 1929, the stock market crashed, and stock prices plummeted. The crash of 1929 led to the Great Depression, the worst economic downturn in American history.

There were a number of factors that contributed to the crash of 1929, including:

  • Speculation: Investors were speculating on stocks in the hope of making quick profits. This drove up stock prices to unsustainable levels.

  • Easy credit: Banks were making it easy for people to borrow money to buy stocks. This further fueled speculation and drove up stock prices.

  • Overproduction: American businesses were producing more goods than consumers could afford to buy. This led to a decline in profits and a decline in stock prices.

  • Unequal distribution of wealth: A small number of wealthy Americans owned most of the stock market's wealth. This meant that when the stock market crashed, it had a devastating impact on the economy as a whole.

  • The crash of 1929 had a profound impact on the American economy and society. It led to widespread unemployment and poverty. It also led to a loss of faith in the stock market and in the American economy as a whole.

  • It led to a number of reforms, including the creation of the Securities and Exchange Commission (SEC) to regulate the stock market and to protect investors. The SEC was created by the Securities Act of 1933 and the Securities Exchange Act of 1934.

The crash is still remembered today as a dark chapter in American history. It is a reminder of the dangers of speculation and the importance of financial regulation.

Post-1929

The New York Stock Exchange (NYSE) underwent a number of changes in the years following the stock market crash of 1929. In an effort to restore confidence in the market and prevent future crashes, the government enacted a number of reforms, including the creation of the Securities and Exchange Commission (SEC) in 1934. The SEC was tasked with regulating the securities industry and protecting investors.

In addition to government regulation, the NYSE also implemented a number of changes of its own. In 1949, it switched from a floor-based trading system to a hybrid system that included electronic trading. This helped to improve the efficiency of the market and to reduce the risk of human error.

The NYSE also began to diversify its offerings in the years after 1929. In 1956, it launched the Stock Exchange Automated Quotations (SEAQ) system, which provided real-time stock quotes to investors. In 1966, it launched the New York Stock Exchange Composite Index, which tracks the performance of all NYSE-listed stocks.

The NYSE continued to grow and evolve in the decades following World War II. In 1971, it began trading options. In 1983, it launched the New York Futures Exchange (NYFE), which trades futures contracts on a variety of assets.

In recent years, the NYSE has faced increasing competition from electronic trading exchanges. However, it remains the world's largest stock exchange by market capitalization.

Here is a timeline of some of the key events in the history of the NYSE after 1929:

  • 1934: The Securities and Exchange Commission (SEC) is created to regulate the securities industry and protect investors.

  • 1949: The NYSE switches from a floor-based trading system to a hybrid system that includes electronic trading.

  • 1956: The NYSE launches the Stock Exchange Automated Quotations (SEAQ) system, which provides real-time stock quotes to investors.

  • 1966: The NYSE launches the New York Stock Exchange Composite Index, which tracks the performance of all NYSE-listed stocks.

  • 1971: The NYSE begins trading options.

  • 1983: The NYSE launches the New York Futures Exchange (NYFE), which trades futures contracts on a variety of assets.

  • 2000: The NYSE merges with Archipelago Holdings, a Nasdaq-listed electronic exchange.

  • 2005: The NYSE Group, Inc. goes public.

  • 2007: The NYSE Group, Inc. merges with IntercontinentalExchange (ICE).

The NYSE has faced a number of challenges over the years, including the stock market crash of 1929, the rise of electronic trading exchanges, and the financial crisis of 2008. However, the NYSE remains the world's largest stock exchange by market capitalization and a vital part of the global financial system.

NYSE and Culture

The NYSE has played a major role in American culture for over 200 years. It has been featured in numerous movies and television shows, often as a symbol of wealth, power, and greed.

One of the most famous depictions of the NYSE in popular culture is in the movie Wall Street (1987). The film follows Gordon Gekko, a ruthless stockbroker who is determined to make money at any cost. Gekko's iconic line, "Greed is good," has come to symbolize the excesses of the 1980s and the NYSE itself.

Another famous depiction of the NYSE is in the movie The Wolf of Wall Street (2013). The film is based on the true story of Jordan Belfort, a stockbroker who was convicted of fraud and money laundering. The film shows the high-stakes world of Wall Street and the dangers of greed and ambition.

The NYSE has also been featured in a number of television shows, including Mad Men, Billions, and Suits. These shows depict the NYSE as a place where dreams are made and broken, where fortunes are won and lost, and where the stakes are always high.

The NYSE is more than just a place where stocks are traded. It is also a cultural icon that represents the American dream and the pursuit of wealth and success.

Here are some other examples of movies and television shows that feature the NYSE:

  • American Psycho (2000)
  • Margin Call (2011)
  • The Big Short (2015)
  • Money Monster (2016)
  • Halt and Catch Fire (2014-2017)
  • Industry (2020-present)

The NYSE is a fascinating and complex place, and it is no wonder that it has been featured in so many movies and television shows.

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