NYSE
A lot of people invest in the stock market; many more follow the market in order to keep track of how the economy is doing. In reality there are actually dozens of different stock markets but to most people when they say the stock market they mean the New York Stock Exchange. The NYSE has become so important in world finance that to most people it is the stock market.
The New York Stock Exchange is by far the biggest exchange in the world. In fact it is so big that it is actually three times the size of the next largest exchange. When most people think about the stock exchange the NYSE is the one they think about. It really does rule the financial world. Since its founding in 1792 the NYSE has changed location several times but it has always remained on Wall Street. This is why Wall Street is synonymous with the financial markets; all the major brokerage houses have offices located near to the exchange.
The NYSE works like most of the older stock markets, the trades are made as an open auction. That means that the brokers meet each other on the exchange floor and agree on transactions amongst themselves. To most people the exchange floor looks quite chaotic and disorganized. However over the years the brokers have worked out their own way of communicating with each other so all that shouting and those hand gestures that you see when you watch the exchange are well understood by the brokers. The number of brokers is strictly limited and a seat on the exchange is very valuable, they often sell for several million dollars. This is because of the high commissions that can be earned by the brokers for executing trades.
Like most things the NYSE has had to keep up with the times. They have actually started to go to a computerized trading system. So trades on the exchange can now be done in two different ways. They can be done through a broker as they always have been or they can be done with a computer like the newer exchanges such as the NASDAQ. This was done to make sure that the NYSE remained relevant and at the forefront in the world of finance.
The NYSE is followed by many people and it has a dramatic impact on the rest of the markets around the world. As by far the largest exchange in the world a big move on the NYSE will likely trigger moves on other markets as well. The way most people follow the NYSE is through the Dow Jones Industrial Average. This is a composite of thirty of the largest stocks traded on the NYSE and it gives a good idea of what the market as a whole is doing. It is this number more than any other that affects other markets.