Financial Management

Financial Management

Unit 1: IP Financial Management

NYSE and NASDAQ

NYSE (New York Stock Exchange) and NASDAQ (National Association for Securities and Dealers Quotations) are predominantly a stock market or exchange where equities are available to be exchanged between interested buyers and sellers. Cumulatively, NYSE and NASDAQ account for a significant proportion of trading of equities done across America and around the world. But regardless of being at the top of their category, they differ in the way they operate along with the equities they offer to their customers. The differences are important to understand so as to be better able to distinguish between NYSE and NASDAQ.

Answer 1

They are similar in a way that they act as a stock exchange with the intention to sell equities to public through creating a platform where exchange and trading of equities among the buyers and sellers can take place. They are well known and are considered as the top in the trading sector with the provision of high-end quality services because of which they enjoy substantial demand in the stock exchange market. Other than that, they both are publicly traded companies or organizations. These are the factors, on which they concur and thus are same to this extent only but other than that, NYSE and NASDAQ are similar by no means.

Answer 2

It is their operations or the working principles on the basis of which they differ substantially despite of working in the same industry for years. The major difference is the physical presence; NASDAQ is a virtual company, predominantly an electronic stock market, whereas NYSE is like traditional stock market with physical presence and geographical premises. NASDAQ relies on electronics, technology and the internet for the company to be run and thus known to comprise high-tech industry. Other differences arise from this and manifests in the type of transaction that takes place at both the exchanges. NYSE is involved in transaction being handled through physical trading, whereas NASDAQ trades its stocks using telecommunication network. Thus NYSE is purely traditional and typical with the representatives of companies trading on behalf of their companies. And NYSE is an electronic stock exchange where investors are put through to the prospective buyers and sellers, using the concept of direct contact system. In addition to that, NYSE is an auction market; where highest bid is corresponded with the trade whereas NASDAQ is a dealer's market where buyers and sellers are connected through the dealers or market makers.

Additionally, traffic controller is the concept pertaining to the stock market and is used to refer to the person who controls the point of sales or intersection where buyers and sellers meet or place orders. They deal with disparate problems to facilitate markets' operational efficiency. For NYSE, traffic controller is the market maker mentioned above, whereas for NASDAQ is the specialist who is the traffic flow controller. Role differs in that market maker is responsible for the growth of the business through creating market for the security NYSE offers while specialist is merely ...