Every weekday from the hours of 10am to 4pm $169 billion dollars on average trades hands from one party to another. It’s the New York Stock Exchange and has been trading stocks since 1817. The stock market has a definite impact on our lives (just ask those who lived during The Great Depression.) It is an institution that has made people unfathomably wealthy, along with impossibly poor. Today the New York Stock Exchange has over 2,300 different companies trading stock valued at just over 16 trillion dollars.
Currently there are over one hundred unique stock exchanges throughout the world. A Stock exchange provides a means for companies to raise capital through issuing stock. This ...view middle of the document...
A dividend is when a company circulates a certain percentage of their profits and reissues them back to investors. This allows investors to get a return on their investment even if the stock’s price is lower than they had purchased it for. A company reserves the right to raise and lower the exact amount of the dividend via press releases.
The New York Stock Exchange was not always the financial giant it is today. When it first began in May of 1792 it only traded five securities, the first of which was the Bank of New York. At the start only twenty-four brokers were allowed to participate in trading. It wasn’t until 1817 that the New York Stock Exchange began to embody something close to what we know today. All of the 24 brokers established a constitution of rules with how the exchange must operate. These rules included everything from how one ’s self could lose their membership to fines for swearing. More importantly though they protected the integrity of the exchange with it’s’ regulations.
The New York Stock Exchange has had its fair share of tragedies as well. In 1920 a bomb went off outside of the exchange killing 38 people; the largest act of terrorism on United States soil at the time. The bomber was never apprehended. The most destructive event of the stock exchange’s life was the Crash of 1929. After World War I the U.S economy was doing quite well. From the period of 1925 to 1928 the stock prices began to rise rapidly. The stock market appeared to families as a secure, strong means to increase their money. Just about everyone was putting their money into the stock market in order to get rich, including businesses and banks. When the market crashed in 1929 million’s would be forever affected. People who bought stocks “on margin” were impacted tremendously. Buying a stock on margin is when a trader is unable to afford the full price of the stock so they must loan it from the broker. The trader must pay incremental payments to the broker until the stock is fully paid off. However, if the stock’s price falls below its initial value the broker issues a margin call requiring the trader to pay the stocks remaining price immediately. Often times the buyer was unable to pay the price of the stock resulting in numerous families to go into debt.
Today the New York Stock Exchange is the largest of its kind in the world. It is home to 84 percent of the Fortune 500 along with 70 of the largest 100 global companies. It has 3,000 employees and even its own quarterly magazine. It has annual revenue of over four billion dollars. The New York Stock Exchange predominately generates money through fees. Fees are charged to both the traders and the companies who wish to be listed on the stock exchange.
Pending on how many shares a company wants to issue the initial listing fee for the New York Stock Exchange ranges from $125,000 to $250,000. After the initial fee the company must pay an annual fee ranging from...