What is The Big Board?
The Big Board, a popular term for the New York Stock Exchange (NYSE), is the oldest stock exchange in the United States. It's located on Wall Street in lower Manhattan, and is the world's largest stock exchange by market capitalization of listed companies (more than $30 trillion as of 2019).
How Does The Big Board Work?
Stocks, bonds, mutual funds, exchange-traded funds (ETFs), and derivatives all trade on the Big Board. The exchange also offers electronic trading products, historical trading information, and order-execution products.
The Big Board is an auction market where brokers and specialists buy and sell securities for people by matching the highest bidding price with the lowest selling price. One of the most distinguishing characteristics of the Big Board is -- unlike the Nasdaq or other electronic exchanges, it has an actual trading floor at 11 Wall Street in New York.
Stocks, bonds, warrants, options, and rights are traded at 22 horseshoe-shaped installations, called trading posts, on the floor of the exchange. On the trading floor, the Big Board works in continual auction mode, where traders working on behalf of investors execute stock transactions. Traders congregate around a pre-ordained trading post where a specialist broker employed by a Big Board member firm serves as an auctioneer in an "open outcry" auction environment. Thus, bringing buyers and sellers together.
The Big Board traces its origins to 1792, when 24 stockbrokers signed the so-called "Buttonwood Agreement" near Wall Street. The first company listed on the Big Board was the Bank of New York. Today, the Big Board is operated by NYSE Euronext, formed by the 2007 merger of the Big Board and Euronext, an all-electronic stock exchange. In 2011, the Big Board and the Deutsche Börse merged.
The Big Board is open for trading Monday through Friday, between 9:30 a.m. - 4:00 p.m. U.S. Eastern Time (ET), excluding holidays designated in advance. (click here to see the list of the NYSE Holidays). More than 1,600 companies are listed on the Big Board, and the average daily trading value hovers around $153 billion.
Specifically known as the "NYSE" or simply, "The Exchange," the Big Board is an unincorporated association governed by a board of directors headed by a full-time paid chairman and comprised of 20 individuals representing the public and the exchange membership in equal proportion.
Operating divisions of the Big Board are broken down as follows: member firm regulation and surveillance; market operations; financial and office services; product development and planning; and market services and customer relations. Specialized staff groups are assigned to other functions, such as government relations, economic research, and legal and liability problems.
Why Does The Big Board Matter?
The Big Board provides an orderly market for securities trading. In the eyes of investors, a firm that's listed on the Big Board has earned an important seal of approval, because of the Big Board's uniquely stringent listing requirements. Companies listed on the Big Board are generally perceived to be more well-established than companies listed on the NASDAQ or other exchanges. However, this is not always the case.
The Big Board, in cooperation with the National Association of Securities Dealers (NASD), also offers an exam for registered representatives who are customers' brokers handling retail buyers and sellers.
For many, the Big Board is a symbol of all that is Wall Street. It is the place where fortunes are made and lost, and where the free market can be seen in its most tangible form.