In 1953 the Curb Exchange changed its name to the American
Stock Exchange and in 1998 the American Stock Exchange
merged with the Nasdaq Stock Market. The New York Stock
Exchange continues to remain an independent entity owned by
its seat holders.
The Nasdaq Stock Market was born in 1971 as a result of
the Securities and Exchange Commission’s decision that the
over-the-counter securities industry needed to be automated.
The SEC asked the National Association of Securities Dealers,
Inc. to develop a market for these securities. This action created
the first electronic stock market.
These three—the New York Stock Exchange, the American
Stock Exchange, and the Nasdaq Stock Market—are the
primary markets where stocks are traded. While regional
and other electronic markets operate and have for some
time, for the most part stock trades are executed on the
NYSE, the AMEX, or the Nasdaq. There are many places to
learn about the evolution of the stock markets and how they
work, and, as with most subjects these days, the best place
to start is the Internet.
The NYSE and AMEX differ from the Nasdaq in one significant
respect. The New York and American exchanges
are both called a “specialist market,” and the Nasdaq is a
“dealer market.”
The difference is in the way orders are taken and executed.
A specialist market—also known as an agency auction market
system—is designed to allow the public to meet the public as
much as possible, meaning people trade with each other and
do not work with dealers. Simply put, it is a place where buyers
and sellers meet face-to-face to trade their stocks. The majority
of volume in these markets occurs with no intervention
from dealers or specialists.