Both NASDAQ and NYSE make up a considerable portion of the market of world equities. The exchanges that they make are estimated to be around $32 trillion in capitalization. They are both stock exchanges from the USA.
However, they are very different from each other in the way in which they function. In this article, we are going to compare these two stock exchanges focusing on the differences between them.
Which One is Older?
The first difference comes from the years in which the two exchanges were created. NYSE was founded in 1792, meaning that it is 228 years old. NASDAQ is a lot younger – 49 years old, being established in 1971.
How is Traffic Controlled?
The NYSE is characterized by having one DMM (Designated Market Maker). The DMM is always prepared to start buying or selling as many shares as necessary to make sure that the market is fair. On the NASDAQ, there is typically more than one market maker. There are usually around 14 market makers for every stock. This way, NASDAQ ensures that its trading is efficient.
What is the Market Type of the Two Stock Exchanges?
The NYSE and the NASDAQ differ from one another, also in terms of their market types. An auction type of market characterizes the NYSE. Different individuals buy and sell shares to each other. Doing this, they make an auction. In the auction type, the highest bidding price matches the lowest asking one.
At the NASDAQ, there is a dealer through whom the individual participants can buy and sell shares to each other. That's why this type of market is called a dealer's market. The buyers and sellers are matched electronically.
What is the Difference between the Listing Fees of the Two Stock Exchanges?
At NYSE the beginning listing fee is $ 50, 000, while the yearly fee is $ 59, 500. For NASDAQ, the beginning listing fee can be from $ 50 000 to $ 75 000. The annual fees depend on the company size and can be from $ 42, 000 to $155, 000.
Size and Market Capitalization
The NYSE's market capitalization is around $ 26 trillion. The NYSE has more than 2 400 companies. Since the NYSE is a very old exchange, there are a lot of blue-chip companies like Walmart that are part of it.
The NASDAQ's market capitalization is around $11 trillion, and it is home to 3 800 companies, which is much more than the NYSE's. The NASDAQ has some huge companies like Facebook, Amazon, and Google. But it also has a lot of smaller companies.
How are the Two Exchanges Perceived?
NYSE companies are supposed to be less volatile. This is so because the NYSE is home to a lot of blue-chip companies that are very old and stable. The companies at the NASDAQ are thought to be more volatile. The NASDAQ is home to most of the companies related to the Internet. That's why the NASDAQ is famous for being the high-tech market.