The New York Stock Exchange (NYSE) is the world’s largest stock exchange. It is sometimes erroneous referred to as Dow Jones. Dow Jones is not the stock exchange but simply an index for some of the stock trade on the New York stock Exchange. The exchange is located on Wall Street and the term Wall Street is sometimes used for the stock exchange even though Wall Street contain numerous other financial institutions and banks. The total value of the companies traded on the NYSE was US$13.39 trillions as of Dec 2010. NYSE is run by NYSE Euronext who also runs Euronext and was formed by the NYSE Euronext merger in 2007.
The history of the NYSE can be traced back to 1792. It was created when the Buttonwood Agreement was signed by 24 stock brokers at 68 Wall Street in New York under a buttonwood tree. The tree than gave the name to the agreement. It would however not be until March 8, 1817, that the organization adopted a constitution and the name”New York Stock & Exchange Board”. In 1863, the name was changed to the current version. It was not until the 1890s that the stock exchange and its trade volumes really started growing. As an example of the growth during this period it can be mentioned that the traded volume grew by a power of six between 1896 and 1901.
The growth of the NYSE has however been far from a pure success story. This was for instance ground zero for the 1929 financial crises that would devastate the economy and see indexes drop by 89% before stabilizing. Just like in 2007-2008, this crisis was preceded by a period of innovation and aggressive banking that worsened the effects when the market cooled down.
The NYSE makes it possible for buyers and sellers to trade stocks in listed companies. This makes the market much more efficient and creates better incentives to invest as the stock gains liquidity. If a company is not listed it is hard to trade in it since you have to go out and find a buyer yourself. Up until 2001, stock where traded and listed in fractions on the NYSE. Since 2001 they have been listed in Dollars and Cents allowing for more precise prices and valuations. The trade on the New York Stock Exchange used to be carried out on the brokerage floors but is today computerized for more effective and swifter trading.
Buying stocks is easy since most stockbrokers around the world offer trading on the NYSE. Some do it directly through their computer systems while others will require you to call a broker to trade on the NYSE. If you want to trade on the NYSE outside the United States you need to take into account both the potential of the stock and the fluctuations of the USD to evaluate if a certain stock is likely to be a good investment for you.