Stock Exchange New York

OBJECTIVES

Knowing the international stock market, the way of negotiation and the conditions thereof.

properly interpret the ratings issued by the NYSE, previously knowing its origins.

Acquire the prerequisites for the management of information and knowledge infrastructure NYSE.

EXCHANGE OF NEW YORK

1. ENVIRONMENT.

Wall Street is a street, an address in the city of New York, which is exactly from Roosevelt Drive near the East River, to the old Trinity Church. But it is not the street that mean when someone asks "how Wall Street works?" Or "who says Wall Street?". This Wall Street is a market.

Specifically is a market where agents are merchants and customers to buy and sell stocks and bonds. They consist of all individual sites and the entire community of interest that unites them and which is monitored closely by the Securities and Exchange Commission - Securities and Exchange Commission (SEC). Thus it is a short and convenient refererir to bag form where the securities are traded in an auction process: the Stock Exchange of New York - New York Stock Exchange (NYSE), American Stock Exchange - American Stock Change (AMEX) and regional stock exchanges.

It also includes the national network of brokers / traders known as the off-exchange market Over the Counter Market (OTC) SIGNED brokers and their employees, and a wide variety of both individual and institutional investors. Wall Street also be defined with greater precision according to its two most important functions: providing a primary market and a secondary ma

2. HISTORY.

The dirt road acquired its name Wall Street (Calle del Muro), due to a wall of wall built of mud wall built along it, shortly after NY was founded as a center of Dutch trade in the year 1,609. the later enhanced with a wooden fence, a wall was built to keep the cows in and outside the Indians. Little about his success with cows.

2.1 HISTORY

The first traders had many businesses. Buying and selling products of the agricultural sector: such as skins, molasses and snuff; traded foreign currencies, they secured with goods and speculated earth. However not formally invested in stocks and bonds as even the possession of George Washington, Wall Street did not Stock Exchange.

3. OPERATION OF THE BAG.

The NYSE is a non-profit organization led by a committee of directors composed of ten representatives of the public of intermediaries and of a president, working all the time. Public representatives come from all directions and currently comprise company directors, faculty members, a former diplomat and director of the pension fund retirement. Representatives of professional traders cover a wide range of activities within or out of the bag and even outside New York.

Are members of the Steering Committee who have the responsibility of establishing activity programs and policies of the bag. The high staff is responsible for the implementation of such programs and policies.

The number of members is 1366. NYSE membership is acquired after professional justification, by buying a seat to a member wishing to sell theirs. Of the 1366 members all belong except 140, who can not be members of the exchange, they are however subject to the same scrutiny as the members themselves: but do not have access to the sessions, since they are not members. The new member will present types of possible activities:

It can be done broker a commission or "commission broker", executed in each session sales orders or purchase by customers transmitted;

You can become an expert, ie, responsible for organizing the market for certain securities, limited in number so that accurate, correct and orderly quotations are maintained;

You can be "odd-lot-broker" who sell and buy the public shares at less than the normal transaction unit of a hundred-called "round lot" number;

It can be done "floor broker" or "two dollar broker" who merely transmit or execute orders on their own of the most important brokers;

You can get a "dealer" inscribed buying and selling in the session on their own;

You can finally be "block positioner" acting as a "dealer" but for the purchase and sale of packages particularly important titles.

Of the 523 member companies of the NYSE, approximately 440 are in relation to the public. The remaining part deals with other "brokers" or "dealers". Many intermediary companies that have relationship with public relations are important, with a very diversified internal organization allowing performing various financial transactions among which are: the purchase of shares or obligations on behalf of individual and institutional investors; guarantee new issues, the sale of shares of mutual investment funds, the launch of the management of these mutual funds, transactions in commodity exchanges, act as important "dealer" for certain values, often amounts. However, some companies specialize in only one or two of these functions.

The NYSE is subject simultaneously to the decisions of its Board of Directors and control of the SEC. Most of NYSE members have offices in almost all some major US cities Many of them have opened offices in Canada, Latin America, Europe and Asia in fact a significant proportion of the activity of the NYSE comes from foreign orders.

4. CONDITIONS OF TRADING ON NYSE

A value can not be traded on the NYSE before being formally released to the market quote by the Board of Directors. To admit its common shares, the companies have to comply with several criteria in relation to the number of existing shares already held by the public, the exchange value of these shares, the number of shareholders and profitability.

They also need to commit to regularly publish financial information, to grant voting rights to holders of ordinary shares, to accept the delegation of powers actions and, finally, to supply all indications regarding events that could affect changes Titles.

Other different criteria apply to the listing of debt and "Warrants". Any company that has managed to be listed must continue to respect the commitments originally made regarding the number of shares held by the public, its market value and the number of shareholders.

5. MECHANISMS OF ENGAGEMENT

The bag as such does not buy or sell securities and does not fix prices. It simply provides local and the different services through which millions of individual investors and institutions can buy and sell for the cause of intermediaries called "Brokers".

In practice, an investor gives order to an agent registered with the SEC, meanwhile associated with a company member brokers of the bag, to sell or buy shares, is the current market price, is a stipulated price. The intermediary company sends the order by telephone or electronically, the partner who is in the enclosure of the bag. This partner is then directed to post Corro place where the value is negotiated and contracts at that time with other brokers or the expert. The stock market is in fact a market where the award is made permanent in both directions, confronting the demands and offers competitively. If the price is considered satisfactory, he said member of the bag makes the transaction through verbal agreement with another broker or the expert. these transactions have reached a millionaire sums of dollars in one day: Although transactions are transcribed, all supported on mutual trust with each other are intermediaries. Each transaction is taxed on the tape of a tiker in a few seconds and then is transmitted to the company having offices in all States, in Canada and in Europe. Confirmation of completion of the transaction is sent electronically to the headquarters of the company that sends the means used by the buyer and the seller. This procedure requires two to three minutes after the order received from the customer until receipt of confirmation from headquarters.

The expert will intervene in the transaction only when supply and demand are out of balance. If more orders sales shopping, the specialist said value makes the momentary equilibrium becoming buyer of all or part of the amount of value offered are presented inside the bag, and with respect to a particular value,. Conversely, sell for their own account when the repurchase orders were higher than sales orders.

5.1. The expert

The expert is a miembrote the bag permanently installed in a particular place, always the same, the circle Floor where simultaneously plays the role of Broker (Agent broker) and Dealer (Main actor).

As Agent, execute commands to change limits that do not necessarily reflect the market change, on behalf of the public, orders that have been given by other members of the exchange. As Dealer buy and sell on their own to organize the market on the securities in which he is an expert.

5.1.1 Role of Intermediary (Brokerage- Function)

In its capacity as expert broker executes orders mainly limited to changes that have been transmitted by pure intermediaries; is the case where a broker receives a limit order to buy at 55 an action that is contracted to 60. When executing this order from the moment the market exchange reaches the stipulated time, the expert allows brokers perform other operations in other posts. The specialist may also, be responsible for executing orders when deemed appropriate, being his own judgment considered the best or has been canceled and converted into a purchase order or retail market exchange limit order with change.

5.1.2. Paper Dealer

This second role of the expert is to negotiate on their own securities whose market organized, allowing the most precise orderly fashion changes are made.

The expert does so smaller differences in prices resulting from the significant differences between sales orders and purchase orders. Similarly it Guaranteed and continuity in setting changes would not be possible otherwise, thus contributing to market liquidity. The expert thus allows the execution of orders of investors to the best changes when there is a momentary gap between the offered changes and defendants.

To fulfill its role the expert usually buy the stock at a higher than market price and sell at a lower price, being the only one that can and must, however, to preserve a market ordered expert sometimes obliged to sell and buy shares in other conditions. It is not obliged to oppose a rise or a relatively significant low.

6. LIQUIDATION AND REDRESS

After execution of the transaction, the buyer the seller must liquidate it within 5 working days.

The buyer must provide the funds needed to take ownership of the action, and the seller must send the certificates representing ownership of its shares to your broker. However certain stocks can be purchased discovered, ie, a broker or a bank will grant a credit to a buyer to cover a portion of the purchase price. However these operations are strictly regulated discovered. Short sales are also authorized in the bag.

When the broker who has directed the seller receives certificate of ownership of the action (endorsed by the seller), sends the person responsible for the materialization of transfers, usually a bank or a trust company; that company writes a new certificate with the name of the buyer.

The transfer of ownership of securities between buyers and sellers, involves "physical" handling a large volume of paper, and in particular certain risks ocasionándose error. Consequently, the NYSE has established an agency specializing in such transactions, the "depository trust company", which have a considerable number of shares and share certificates deposited by brokers, dealers, banks and trust company. Thus, transfers can be made electronically reducing the number of transfer manipulation.

All shares listed on the stock exchange are recorded in books of the issuing companies with the owner's name. Many obligations are also registered by name, but they can, many also be bearer bonds: then exporter is considered, without having names on a certificate or in books of society.

The buyer and seller both pay a commission to the broker, during these transactions. Commissions on the NYSE reached just under 2% of the value of trading of the shares. This percentage is sometimes higher when transactions relate even large number of titles.

7. MARKET IN THE MARGINS OF THE QUOTATION: OVER THE COUNTER MARKET.

Purchases and sales of securities that are traded on or regulatory bags are made in the Over the Counter Market (OTCM). This market does not have a specific seat but is made up of a network of several thousand dollars installed throughout the territory of U.S.A. who buy and sell securities by phone or teletype, or by electronic communication system, these dealers, market makers called manifest willing to purchase or sell securities, changes they say. Since the dealer operates on its own, this change affects an additional payment that increases the price of a purchase. A dealer usually holds a particular stock exchange, so that can deliver to other dealers and brokers operating on behalf of its customers, retail.

OTCM in securities issued by any American company is hired, whatever its size, legal form, the goods and services produced; whether these securities are issued by concessionaires of public services (publice utilities) or chemical companies or pipeline, either by transport companies, textile companies, breweries, department stores, producers of raw materials, etc. Most banks and insurance companies have their securities listed on the MTSO, and so does a large number of foreign securities.

It is an association of professionals, the National Asociation of Segurity Dealer (NASD) which is responsible for regulating the MTSO. This self-regulatory body is registered with the SEC and is working closely with that organization. Competition is therefore the SEC monitor operation of stock exchanges and the NASD, which have the power to take all necessary measures to that exchanges are made in the most fair and more equitable conditions possible. Likewise, it can censure members who had violated its rules, impose fines, suspend or even expel them.

NASD periodically controls the books and documents of all members of the association, without warning, if observed all existing rules and in particular the need for a minimum capital.

8. AUTOMATED TRADING SYSTEM CREATED BY THE NASD

8.1. ORIGIN

This system is generally designated by the NASDAQ initials, which means Segurity National Association of Dealers Automatic Qotations Sistem. The NASDAQ is a computer recomunicaciones system, which collects and preserves the instarte, prices sessions conducted by the network of dealers in the OTCM. With respect to the values ​​that have been enabled to integrate into said electronic system.

The NASDAQ has been created to solve the problems posed by the extraordinary volume growth in the OTCM negotiations. Previously the broker were forced to consult by phone to several dealers to know which were the best prices orders, purchase or sale. In the practice of a broker it was not sure exactly knowing the best price. He did not have the opportunity to consult all dealers trading the same value.

Requests for information and applications from companies wishing to see their titles appear in the OTCM became so numerous that the functioning of that market began to threaten.

9. FINANCIAL INDICATORS

DOW JONES Created in 1883 by reporters Charles Dow and Edward D. Jones. In the beginning was to take the 12 companies that made up the bag then add their values ​​trading and divide by twelve, this average served to adapt the market, now the 30 companies listed on the stock to the market average are taken into account .

NASDAQ electronic market largest existing in the world in turn has three indicators Nasdaq Composite Index, Nasdaq 100 Index and Nasdaq 100 Index finantial.

S & P 500 Index that incorporates the behavior average price of 500 shares of the stock exchange in New York.

CONCLUSIONS

The knowledge and good management of information, the interpretation given to it, is what gives you handling the stock market in the world.

The integration of a centralized market allows better management and control of it, giving us some certainty and security at the time of the negotiations