3 Major Stock Exchanges in the US, What are 3 Major Stock Exchanges in the US?

Stock Exchanges 

Stock exchanges are common marketplaces for people to buy and sell financial instruments like government securities, Commodities, Derivatives, and Equity shares among others. Most of the stock exchanges are almost governed by the respective countries and regulatory bodies by SEC, SEBI, and FCA among others.

Firms generally use the exchanges to sell securities to raise the capital necessary for firms to upgrade the firm's overall position and get the best of capital to make value addition in terms of R&D and improving the operating costs.

As we stated earlier to make one’s firm be listed on the stock exchange there are regulatory requirements like a minimum capital requirement, audited earning reports transparency in the board meeting decision-making that might be detrimental to the firm's standing in the financial market.

Overall exchanges serve as a place for firms to get the necessary capital they require for growth and be taxed for it, that suits the government of the day.

3 Major Stock Exchanges in the US

 The 3 Major Stock exchanges are the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotation (NASDAQ), and the Chicago Stock Exchange (CHX). Of these New York stock was the oldest which was started way back in 1792.

The stock exchange hosts the 70 biggest corporations in terms of their market capitalization. The NYSE holds the S&P Index which is one of the top indices in the US stock market. The index holds the mid-cap and large-cap companies.

The NASDAQ is the second biggest stock market company with its market capitalization in the world. It was founded in 1971 to bring electronic trading initially with automated stock quotes. 

The companies listed in NASDAQ are quantified based on their market capitalization size with three categories Capital Market, Global Market, and Global Select Market. The exchange is known for bringing innovation like online trading.

Chicago Stock Exchange was founded in 1892  initially with the name of  Midwest Stock Exchange and started its beginning but the globalization that started after the fall of the USSR in 1991 adversely affected the region and in the early 2000’s exchange struggled to keep up with new innovation and best trading practice so in September 2003 the securities Exchange commission made the certain regulatory revision to make its come back.

But ultimately the company was bought by the ICE (Inter-continental Exchange) in 2018 and the exchange is surviving based on data pillar support of NYSE and now does electronically exchange-traded funds.    

What is the Role of the Stock Exchange in our Financial World? 

The role of Stock Exchanges in our financial world has been questioned since the 2008 financial crisis and the subsequent the occupy wall street movement in 2011. Now we will see their role based on a recent paper done by the International Organization of the Securities Commission (IOSC) titled “Evolution in the Operation, Governance and Business Models of Exchanges: Regulatory Implications and Good Practices” 

In this paper primarily talks about the organizational and structural changes in oversight regulation of the stock exchanges like a process of Demutualization. In which the stock exchange will be listed as a publicly listed company on a bigger multinational exchange and give public ownership of the stock exchanges through shareholding within big multinational stock exchanges like ICE and NYSE example.

Other examples like the London Stock Exchange Group, for emerging markets like Brazil with examples of the B3 group and NSE for India respectively. 

In this highly integrated stock exchange market, they have outlined three methods of functioning they are dual hatting (same person with multiple responsibilities), multiple reporting lines (order of hierarchy), and letterbox entities(outsourcing) each of them has a certain caveat or tradeoff one can argue.

Do read more about them in their full paper to know more about the context they are talking about in their paper.  But the paper in our viewpoint misses the key point of the black swan events like COVID-19 or the 2004 tsunami or upcoming or ongoing climate catastrophe that is causing new upheavals across the regions.

This paper is presented for public consultation with the last date of July 3rd, 2024 for valuable suggestions do read their paper on their website and give your comments on them via the email that is on their website.

From this, we see stock exchanges are going to be more integrated and financial markets however inclusive and amorphous one wants to portray. they are doing what they are supposed to do which is divulging the capital legally and easily.   

What are the Two Largest Stock Exchanges in the United States? 

The Two Largest Stock Exchanges in the United States are NYSE and NASDAQ  both of them have since grown with new innovations in the financial market. 

NYSE:

NYSE Engages in trade in Equities, Options, Bonds, and ETPs. It was founded based on the Buttonwood Agreement signed by 24 stockbrokers the 1792 and has grown since On its website it boasts high moments of Exchanges like the first permanent female member, Muriel Siebert in 1967  and Joseph L. Searles III in 1970 as the first black member to enter its floor.

And also lows like the 1929 market crash on which 16,000,000 shares were traded, which is market record that won't be surpassed for another 34 years which led to major reforms and the formation Securities Exchange Commission in 1934.

And reopening after the September 11, 2001. Etched in the exchange history. The exchange was bought by the ICE Intercontinental Exchange in 2013.

Operating time: The opening begins at 9:30 a.m. Eastern Time, while the closing happens at 4:00 p.m.

Now it is riding on the high technology wave with new innovations like Broker Booth Support System, Pillar a integrated trading technology platform for smooth trading in the electronic mechanisms, and many more in the pipeline for upcoming new fin-tech innovations that are coming to its doorstep. 

NASDAQ:

National Association of Securities Dealers Automated Quotation(NASDAQ). With disruption at the core of it’s foundation in 1971, the exchange was the first in the world to bring the electronic traded system in the price quotation.

An important aspect in the equity share price with the innovation of the Bunker-Ramo data center with the help of UNIVAC 1108 mainframe computers that propelled the change. one can see these changes more engagingly if they visit the Museum of American Finance located in the Manhattan Financial District.

With Intel's IPO in 1971, the exchange cemented its place for tech and innovation which led to more tech companies placing their IPOs since then. Nasdaq-100 Index started its journey in 1985 which led to tech companies and startups in tech firms seeing more acceptance in the financial markets.

The NASDAQ now has more than 4,000+ company listings on their exchange

Operating time: It has trading hours of 9:30 a.m. and 4:30 p.m. EST. 

Types of Stock Exchanges 

Stock Exchanges are a way to raise capital other than banks via loans. With new innovations in govt securities and bonds the stock exchanges have become more filled with various tools and requirements Just to access and assess the quantity of sheer data that’s being thrown on them.

Based on the things one can buy they are broadly classified into primary and secondary markets while primary deals with securities and secondary market deals with stocks. They are also classified based on the location, area served, and type of financial instruments that they handle.  

National (NASDAQ), Regional (Boston Stock Exchange), and over-the-counter exchanges are some of the most common types of exchanges. Commodities and currency exchanges are for more seasoned traders.

But now there are more specific, even sub-specific categories for new areas of business that are emerging and need to be financed so that new businesses can bring new value addition and innovation these are like Cryptocurrency Exchanges that are being made system-ready by the respective regulators to have proper checks and balance in them.