Here Are the Major Stock Exchanges in the United States of America
A stock exchange serves as a platform where individuals and institutions engage in the trading of various financial assets, including securities, commodities, derivatives, and other investment instruments. In the past, brokers and traders would convene in person at these exchanges to facilitate stock transactions.
However, in the contemporary landscape, the majority of financial trading occurs via electronic and automated means on stock exchanges. Numerous stock exchanges operate worldwide, and now, let’s explore the prominent stock exchanges in the United States.
Major Stock Exchanges in US
Here are the major stock exchanges you should know about before starting to invest in US stocks:
New York Stock Exchange (NYSE): The NYSE is the biggest equities exchange in the world. It also uses an auction system unlike others, which have transitioned to electronic systems.
Nasdaq Exchange (NASDAQ): The NASDAQ is an electronic exchange that focuses on tech-based companies.
1. NYSE
The New York Stock Exchange (NYSE) holds the distinction of being the world’s largest stock exchange by market capitalization.
Established in 1792, it is situated in the heart of downtown Manhattan in New York City. In 2007, it merged with the European Stock Exchange, known as Euronext, to create the entity now recognized as NYSE Euronext, although Intercontinental Exchange (ICE) has held ownership of NYSE since its acquisition in 2013.
The NYSE features an extensive listing of over 2,500 stocks, including numerous prominent US blue-chip companies. To secure a listing on the NYSE, a company must have at least 400 shareholders and 1.1 million outstanding shares.
This exchange is often referred to as the ‘Big Board’ due to its dual-floor structure, one dedicated to equities and the other to the NYSE American options exchange.
Traditionally, the NYSE heavily relied on floor trading using the open outcry system. However, in recent times, the majority of trading activities have transitioned to electronic systems, with market makers playing a pivotal role in facilitating both physical and automated trading.
The quotes provided by these market makers are competitive with those of floor traders and other participants in the market.
2. NASDAQ
The National Association of Securities Dealers Automated Quotations (NASDAQ) holds the position of being the world’s second-largest exchange. Its inception in 1971 marked a significant milestone as it became the first electronic exchange, pioneering the use of computers to facilitate the matching of buyers and sellers.
NASDAQ, In 2006, made the strategic move to separate from the National Association of Securities Dealers, evolving into its own publicly traded entity. Presently, NASDAQ stands as a global electronic marketplace dedicated to the trading of securities, boasting a listing of more than 3,300 companies, including industry giants like Apple, Amazon, and Google.
It currently oversees 29 markets, a clearinghouse, and five central securities depositories across the United States and Europe.
While the NYSE holds the top spot in market capitalization, NASDAQ distinguishes itself by having a greater number of listed companies. Its status as a fully electronic exchange is underpinned by modern infrastructure, proprietary electronic systems, and competitive listing fees.
These attributes make NASDAQ an attractive choice for investors and a favorable platform for startups, thanks to its relaxed listing requirements and regulatory environment.
Other Stock Exchanges in the US
There are other exchanges in the United States that are categorized by their geographical location within specific cities.
3. Boston Stock Exchange (BSE)
Established in 1834, the Boston Stock Exchange holds the distinction of being the third-oldest exchange in the United States. True to its name, it operates as a regional exchange in Boston, Massachusetts.
The exchange includes both the Boston Equities Exchange (BEX) and the Boston Options Exchange (BOX), and it came under the ownership of Nasdaq in 2007.
4. Chicago Options Exchange (CBOE)
The Chicago Board Options Exchange (CBOE) stands as the largest options exchange in the United States, providing options on a broad spectrum of assets including 2,200 companies, 22 stock indices, and 140 exchange-traded funds.
CBOE’s inception took place in 1973 in Chicago, and it conducted its inaugural trading on April 26, 1973. Notably, CBOE holds the distinction of being the birthplace of the CBOE Volatility Index (VIX), which has become the preeminent and widely acknowledged measure of market volatility.
5. Chicago Board of Trade (CBOT)
Founded in 1848, the Chicago Board of Trade (CBOT) holds the distinction of being the oldest commodity exchange worldwide.
Initially, CBOT exclusively facilitated trading in agricultural commodities such as wheat, corn, and soybeans. Today, it provides options and futures contracts spanning a diverse array of products, including gold, silver, US treasury bonds, and energy commodities.
Additionally, CBOT is under the ownership and management of CME Group Inc
6. Chicago Mercantile Exchange (CME)
The Chicago Mercantile Exchange (CME) , commonly known as ‘the Chicago Merc,’ is a global derivatives marketplace headquartered in Chicago. Its origins trace back to 1898 when it was established as an agricultural commodities exchange operating as a non-profit organization. In a significant development in 2007, it merged with the Chicago Board of Trade (CBOT), becoming a designated contract market within the CME Group.
In 2008, CME Group Inc. received regulatory approval for CME, CBOT, NYMEX, and COMEX as its constituent markets. Presently, CME stands as the world’s foremost futures exchange, boasting the most extensive open interest in options and futures contracts across various financial instruments, including interest rates, equities, currencies, and commodities.
7. NYSE Chicago
Located in Chicago, Illinois, NYSE Chicago, formerly recognized as the Chicago Stock Exchange (CHX), underwent a transformation in July 2018 when it was acquired by Intercontinental Exchange (ICE).
The exchange was subsequently rebranded as NYSE Chicago in 2019. As a national securities exchange, NYSE Chicago also functions as a self-regulatory organization, adhering to the regulatory framework set forth by the US Securities and Exchange Commission (SEC).
8. International Securities Exchange (ISE)
The International Securities Exchange (ISE) comprises both the ISE Options Exchange and the ISE Stock Exchange, operating as an electronic exchange. Launched in 2000, its primary objective was to enhance liquidity and enable swift transaction execution for investors.
In 2016, NASDAQ acquired ISE, making it a wholly owned subsidiary. Today, NASDAQ ISE facilitates trading in equities, indexes, and exchange-traded funds for over 3,000 companies.
9. Miami Stock Exchange (MS4X)
The Miami Stock Exchange (MS4X), situated in Miami, Florida, serves as a regional exchange providing trading services for equities, currencies, and futures.
Miami, being a central hub for G27 trading services encompassing 27 Latin American and Caribbean Exchanges, positions this exchange strategically. It offers a comprehensive suite of trading, processing, and distribution services accessible to all types of investors.
10. National Stock Exchange (NSX)
The National Stock Exchange achieved a pioneering milestone as the first stock exchange to transition entirely to electronic trading.
Its establishment dates back to 1885, and it is presently headquartered in Jersey City, New Jersey. In 2017, the NYSE acquired NSX, subsequently rebranding it as NYSE National.
11. Philadelphia Stock Exchange (PHLX)
The Philadelphia Stock Exchange (PHLX) underwent a transformation when it was acquired by NASDAQ in 2008, becoming known as NASDAQ OMX PHLX. PHLX holds a historic distinction as one of the oldest exchanges in the United States, with its formation dating back to 1790.
It holds the distinction of being the first exchange to embrace electronic trading and introduced the innovative stock order routing and execution system known as PACE. Presently, PHLX primarily specializes in options trading, encompassing over 2,600 US dollar-settled options, sector index options, and equity options.
Conclusion
Stock exchanges serve as vital platforms for global trading, encompassing a wide array of financial assets. While traditional in-person trading has given way to electronic systems, numerous stock exchanges operate worldwide.
In the United States, major exchanges like the New York Stock Exchange (NYSE) and Nasdaq dominate, each with its unique features. Additionally, regional exchanges, such as the Boston Stock Exchange and Miami Stock Exchange, play essential roles. These exchanges, with their diverse offerings, underscore the dynamic nature of financial markets.