1. The Stock Market West Morris Central Mrs. Pollison

3. New York Stock Exchange (NYSE) Began in 1792 Buttonwood Agreement 24 NYC stockbrokers & merchants 1934 – registered as national securities exchange 1971 – incorporated as not-for-profit corp. World’s foremost securities marketplace 9:30 am – 4:00 pm EST (Monday-Friday) www.nyse.com

4. 1899 – brokers checking the Ticker Tape

5. What makes the NYSE unique? Each day on the NYSE trading floor an auction takes place. Market professionals, supported by advanced technology, represent investor orders. Stock prices are determined according to the laws of supply and demand. Buy and sell orders for a given stock interact in a single location, ensuring that each order is exposed to the widest range of potential buyers and sellers as possible, no matter how big or small.

7. NYSE Mission: The NYSE’s mission is to add value to the capital-raising and asset-management process by providing the highest-quality and most cost- effective self-regulated marketplace for the trading of financial instruments, promote confidence in and understanding of that process, and serve as a forum for discussion of relevant national and international policy issues.

8. The Trading Floor 48,000 square feet Main Room, Garage, Blue Room, 30 Broad Street Room 20 trading posts 340 trading positions 3,000 people working on trading floor 1,500 trading booths around the floor

9. Trading Floor FAQs The floor houses 20 trading posts each manned by a specialist and specialist clerks. Every listed security is traded in a unique location at one of these posts and by one specialist. All buying and selling takes place around these posts. Computer monitors above each specialist location indicate which stocks are traded there. Member firms may send orders electronically from the floor directly to the specialist through the NYSE SuperDot system.

10. Orders are transmitted to broker booth locations from the floor by telephone electronically through the Broker Booth Support System (BBSS). Once an order is received by a broker, he or she represents that order as an agent in the trading crowd of that stock.

11. Anatomy of a Trade: Investor places an order to buy or sell shares. Brokerage firm checks the customer’s account. Provides pricing info & enters order details. Transmits order to trading floor (computer or phone). CMS-Superdot – routes order to broker’s booth or specialist. CMS=Common Message Switch

12. Member Firms: A company or individual who owns or leases a “seat” on the NYSE. (until 2006) 1,366 seats (1953-2006) Members were assigned seats during roll call until 1871 Most expensive seat: $4 million (12/1/05) 2006 – seat holders became stockholders after merger with Archipelago Exchange Only member firms can buy & sell securities on NYSE trading floor. Rigorous professional standards. Initial listing fees and annual fees.

13. The “new” New York Stock Exchange: NYSE and ArcaEx merged (2006) NYSE – world’s leading equities market ArcaEx – most successful totally open, fully electronic exchange NYSE Euronext, the holding company created by the combination of NYSE Group, Inc. and Euronext N.V., was launched on April 4, 2007. world ' s largest and most liquid exchange group and offers the most diverse array of financial products and services. brings together six cash equities exchanges in five countries and six derivatives exchanges a world leader for listings, trading in cash equities, equity and interest rate derivatives, bonds and the distribution of market data.

14. Stock & the Hybrid Market: More than 90 million Americans own shares of stock Individual investments Mutual funds Retirement funds, insurance co’s., banks Hybrid Market: Integrates auction market and automated trading NYSE new market model

15. Floor Broker: acting as an agent, executes orders to buy or sell stocks on behalf of a client. House Broker Employed by large, diversified broker-dealers Executes orders for firm’s customers or firm’s acct. Independent Broker Individuals Serve house brokers, general public, customers “agent entrepreneurs”

16. Specialists manage the auction market in the specific securities allocated to them. 5 functions: Manage the auction process. (fair & orderly process) Execute orders for floor brokers. (immediately or hold) Serve as catalysts. (buyers & sellers) Provide capital. (use firm’s own capital/supply & demand in balance) Stabilize prices. (buy & sell stock to avoid unreasonable price variations) 443 specialists 10% of all shares traded most manage 5-10 stocks

17. NYSE Specialist Firms: Banc of America Specialist Bear Wagner Specialists LLC Kellogg Specialist Group LaBranche & Co. LLC Spear, Leeds & Kellogg Specialists LLC SIG Specialists, Inc. Van der Moolen Specialists, USA LLC

18. The Trading Bell 1870’s – first bell 1903- present location – brass bells Opening Bell & Closing Bell – signal beginning & end of trading