Let’s have a look in more detail at the main stock trading markets
New York Stock Exchange (NYSE)
The NYSE dates back to 1792 but was not formalized until 1817 and has grown into the largest stock exchange in the world. Trading used to take place on the floor of the exchange itself via open outcry but now the vast majority of trades are handled electronically. This has had the effect of making the market far more open to ‘stay at home’ traders like ourselves.
The Dow Jones Industrial Average (DJIA or Dow)
The Dow is probably best known of all the major global markets. Created by Charles Henry Dow in 1896 it is still regarded as the bell weather of the US economy listing all the major US companies.
S & P 500
The Standard & Poors 500 contains a broader range of companies than the Dow. Created by Standard & Poors this index measures the 500 largest US companies by market capitalisation.
The US Nasdaq (National Association of Securities Dealers Automated Quotations) is now the fastest growing stock market and was brought about following the need to formalize the trading of over-the-counter (OTC) securities.
The Amex is now called the NYSE Alternext US and trades in small company stocks.
ECNs (Electronic Communications Networks) enable buyers and sellers to trade directly with each other without the need for a Broker.
In the UK the FTSE 100 ( ‘Footsie’) and is the major barometer of the UK stock market and is the UK equivalent of the Dow.
Also in the UK are the broader FTSE 250 and FTSE All-Share which cover a broader range of companies.
This index is Japan’s equivalent of the Dow or Footsie
CAC – 40
This index tracks the top 40 shares trades on the Paris (France) Stock Exchange.
This index tracks the top 30 shares trades on the Frankfurt (Germany) Stock Exchange.
With the advent of online trading it is now possible for investors across the globe to easily access any of these major markets.