NYSE: What Is the New York Stock Exchange?

How the New York Stock Exchange (NYSE) works

The New York Stock Exchange has two primary functions:

• It provides a central marketplace for investors to buy and sell stock.
• It enables companies to list their shares and raise capital from interested investors.

The NYSE provides a location where members can trade stock in listed companies. Historically, traders called out their buy or sell orders to each other on the stock exchange trading floor. When a buyer and seller would agree on a price, a trade would occur. Transactions would then be reported on the exchange, providing transparency and enabling efficient market operations.

Now, with electronic trading, NYSE-run computers are largely responsible for matching buyers with sellers in real time. However, the system still operates in a similar fashion, with investors placing orders and stating at what price they'd be willing to buy or sell.

Most investors aren't NYSE members, but many brokerages that allow them to invest in stocks are. When a brokerage customer places a trade for an NYSE-listed stock, the brokerage relays the order to its NYSE trading operations, which then executes the trade following the customer's instructions. The NYSE also acts as a gateway for companies wanting to raise money by selling stock.

To list stocks on the NYSE, companies must meet the U.S. Securities and Exchange Commission's (SEC) disclosure requirements for publicly traded companies and the NYSE's specific listing requirements. Young companies often seek to have their initial public offerings (IPO) on the NYSE to gain prestige from having their shares traded alongside those of many of the world's top companies.

What are NYSE trading hours?

The New York Stock Exchange is generally open on weekdays and closed on Saturdays and Sundays. Trading begins each day at 9:30 a.m. ET and ends at 4 p.m. ET.

As you can see in the table below, the NYSE observes certain U.S. federal holidays each year. In addition to being closed all day on those days, the NYSE has three half-day sessions each year:

• July 3, the day before Independence Day (unless July 4 is on the weekend or a Monday)
• The Friday after Thanksgiving
• Christmas Eve (if it falls on a weekday)

During those half-day sessions, the market opens at 9:30 a.m. ET but closes early at 1 p.m. ET.

NYSE Market Holidays

History of the New York Stock Exchange (NYSE)

The New York Stock Exchange's history dates back to 1792, when two dozen stockbrokers met on Wall Street and agreed to create an exchange to buy and sell various investments, including stocks and bonds. Known as the Buttonwood Agreement, this pact eventually led to the brokers converging in their current location on Wall Street and Broad Street in the mid-1860s.

Over time, the NYSE has gradually modernized its operations by adopting new technology to facilitate trading activity. Although the stock exchange still has a trading floor, there's now extensive electronic trading activity on the NYSE, complementing the live trading activity that still takes place.

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