Stocks

A stock exchange does not own shares. Instead, it acts as a sort of high-tech market where buyers connect with sellers. Every public stock trades on one of several possible exchanges such as the NASDAQ or AMEX. The primary function of an exchange is to provide sellers a place to liquidate their share holdings. NASDAQ and AMEX account for the trading of a major portion of equities in North America and the world. On the other hand AMEX and NASDAQ are very different in the way they operate and in the types of equities that trade upon them.

NASDAQ is an electronic exchange, is also from time to time called "screen-based" for the reason that buyers and sellers are linked only by computers over a telecommunications network. Market makers, also known as dealers, carry their own inventory of stock. They stand ready to buy and sell NASDAQ stocks, and they are required to post their bid and ask prices. NASDAQ has exceeded the NYSE in the number of both listed companies and shares traded.

NASDAQ was founded in 1971 by the National Association of Security Dealers. When NASDAQ began trading in 1971, it was the first electronic stock market in the world. In which divested it in a series of sales in 2000 and 2001. NASDAQ is owned and operated by NASDAQ Stock Market, Inc. NASDAQ is the largest electronic screen based equity securities market in the United States. NASDAQ has roughly 3200 companies; it lists more companies and on average NASDAQ trades more shares per day than any other US Market. It is home to companies that are leaders across all areas of business technology, retail, communications, financial services, digging, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks. NASDAQ allows multiple market participants to trade through its Electronic Communications Networks structure, thus, increasing competition.

AMEX is an American stock exchange situated in New York. AMEX is a smaller but quite prestigious exchange. AMEX also has a history of innovating: it lead the way of exchange traded funds (ETFs) and it has the second largest options trading market. AMEX is mainly auctioned based; this means specialists are actually present on the exchanges’ trading floors. Each specialist "specializes" in a particular stock, buying and selling the stock in a verbal auction. With AMEX all trades occur on the trading floor of the NYSE.

AMEX is a mutual organization, owned by its members. A mutual organization is a cooperative organization based on the principal of mutuality. A mutual organization is often simply referred to as a mutual. A mutual exists with the purpose of raising funds from its customers, which can be used to provide common services to all members of the organization. A mutual is therefore owned by and run for the benefit for its members. It has no external shareholders to pay in the form of dividends and as such does not usually seek to maximize and make large profit gains. AMEX’s business has shifted over the years from stocks to options and Exchange-traded funds, AMEX continues to trade small to midsized stocks. The American stock exchanged merged with the National Association of Securities Dealer to create the NASDAQ and AMEX Market Group, where AMEX is an independent entity of the NASD parent company. After tension between the NASD and AMEX, the latter group bought out the NASD and acquired complete control of AMEX in 2004.

NASDAQ vs. AMEX

The primary difference among AMEX and NASDAQ is in the way securities on the