SECURITIES 
EXCHANGES

Exchanges are markets where sales of securities and commodities are transacted. Most stock exchanges are auction markets where stocks are traded through competitive bidding in a central location. The oldest stock exchanges in the United States are the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX). There are also seven regional exchanges and others that specialize in commodities and derivatives. The Chicago Mercantile Exchange and the Chicago Board of Trade, for example, are markets where both futures and options on financial and agricultural products are traded.

Stocks are also traded in dealer markets. Most transactions in a dealer market are between principals acting as dealers for their own accounts rather than between brokers acting as agents for buyers and sellers. One example is the NASDAQ, the first electronic stock market, introduced in 1971. NASDAQ’s dealer markets have come to more closely resemble auction markets. As with auction markets, companies must meet size and earnings requirements to trade on NASDAQ.

Over-the-counter (OTC) stocks are another segment of the securities market. Securities transactions are conducted through a telephone and computer network connecting dealers, rather than on the floor of an exchange. OTC stocks, which totaled 3,700 in August 2008, are traditionally those of smaller companies that do not meet the listing requirements of NYSE, AMEX or NASDAQ. OTC trading rules are written and enforced by NASD. The Dow Jones Industrial Average, a price-weighted average of a collection of industrial stocks, was introduced in 1896 and is still widely used as an indicator of stock prices today.
NUMBER OF EXCHANGE LISTED COMPANIES, 1998-2007


Year
NASDAQ
NYSE
AMEX
19985,0683,114770
19994,8293,025769
20004,7342,862765
20014,1092,798691
20023,6632,783698
20033,3332,755700
20043,2712,768725
20053,2082,767812
20063,2472,764821
20073,1582,805812
Source: Securities Industry and Financial Markets Association.
The volume of shares traded on the New York Stock Exchange reached a record of 532 million shares in 2007, rising 17.4 percent from 2006. The average share price rose 8.7 percent.
EXCHANGE ACTIVITIES, 1998-2007


 
NYSE 
AMEX 
NASDAQ 

 Year
Reported share volume (millions)
Value of shares traded ($ millions)
Share volume (millions)
Value of shares ($ millions)
Share volume (millions)
Value of shares traded ($ millions)
1998169,745$7,317,9497,280$287,929202,040$5,758,558
1999203,8518,945,2058,231477,822272,60511,013,192
2000262,47811,060,04613,318945,391442,75320,395,335
2001307,50910,489,32316,317817,042471,21710,934,572
2002363,13610,311,15616,063642,183441,7067,254,595
2003352,3989,692,31616,919563,438424,7457,057,440
2004367,09811,618,15116,636590,652453,9308,727,498
2005403,76414,125,30416,013608,093448,1759,965,442
2006453,29117,140,50017,386602,192500,26411,675,879
2007531,94721,866,80011,656670,192537,26315,115,541
Source: New York Stock Exchange, Inc.; American Stock Exchange LLC; The Nasdaq Stock Market, Inc.; Securities Industry and Financial Markets Association.
STOCK MARKET PERFORMANCE INDICES, 1998-2007

(End of year)



DJIA (1)
S&P 500
NYSE Composite
AMEX Composite
NASDAQ Composite
19989,181.431,229.236,299.93688.992,192.69
199911,497.121,469.256,876.10876.974,069.31
200010,786.851,320.286,945.57897.752,470.52
200110,021.501,148.086,236.39847.611,950.40
20028,341.63879.825,000.00824.381,335.51
200310,453.921,111.926,440.301,173.552,003.37
200410,783.011,211.927,250.061,434.342,175.44
200510,717.501,248.297,753.951,759.082,205.32
200612,463.151,418.309,139.022,056.432,415.29
200713,264.821,468.369,740.322,409.622,652.28

(1) Dow Jones Industrial Average.

Source: Securities Industry and Financial Markets Association.