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as the Chicago Stock Exchange and the Pacific Stock Exchange.
Most exchanges are modeled after the New York Stock Exchange, which
accounts for about 93 percent of the total annual dollar volume of shares traded
on organized U.S. exchanges. In order for a firm’s securities to be listed for trading on an organized exchange, a firm must file an application for listing and meet
a number of requirements. For example, to be eligible for listing on the NYSE, a
firm must have at least 2,000 stockholders owning 100 or more shares; a minimum of 1.1 million shares of publicly held stock; pretax earnings of at least $6.5
million over the previous 3 years, with no loss in the previous 2 years; and a minimum of $100 million in stockholders’ equity. Clearly, only large, widely held
firms are candidates for NYSE listing.
To make transactions on the “floor” of the New York Stock Exchange, an
individual or firm must own a “seat” on the exchange. There are a total of 1,366
seats on the NYSE, most of which are owned by brokerage firms. Trading is carried out on the floor of the exchange through an auction process. The goal of trading is to fill buy orders at the lowest price and to fill sell orders at the highest price,
thereby giving both purchasers and sellers the best possible deal.
Once placed, an order to buy or sell can be executed in minutes, thanks to
sophisticated telecommunication devices. New Internet-based brokerage systems
enable investors to place their buy and sell orders electronically. Information on
publicly traded securities is reported in various media, both print, such as the Wall
Street Journal, and electronic, such as MSN Money Central Investor (www.
over-the-counter (OTC) exchange
An intangible market for the
purchase and sale of securities
not listed by the organized
exchanges. Eurobond market
The market in which corporations and governments typically
issue bonds denominated in
dollars and sell them to investors
located outside the United
States. The Over-the-Counter Exchange The over-the-counter (OTC...
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This document was uploaded on 01/19/2014.
- Fall '13