Stock exchanges are the stores of the stock market. As mentioned in the previous Bite, stock exchanges are the physical locations where investors can buy and sell stock.
Exchanges provide an easy way to connect with a buyer or seller to complete a transaction. However, similar to stores having only a limited number of brands to choose from, a stock exchange only trades certain stocks. To be listed on a stock exchange, a stock must pass an exchange’s listing requirements. The requirements are minimum standards a company must meet to be listed. For example, a stock exchange might require a company to have a certain number of shareholders (investors who own shares of the company).
In the U.S., there are two main stock exchanges: the New York Stock Exchange (NYSE) and NASDAQ.
The NYSE is the largest exchange in the world by value, with a total value of over $28 trillion (as of November, 2021). The exchange is comprised of over 2,400 stocks and is located along Wall Street, which is the iconic eight-block-long street in New York City.
NASDAQ is also headquartered in New York, but operates electronically. The exchange is made up of more than 3,000 stocks. The NASDAQ is known to list the largest tech companies like Meta, Apple, and Microsoft.
Grocery stores have regular opening and closing times and stock exchanges operate the same way. Exchanges typically open at 9:30 am EST (8:30 am CST, 6:30 am PST) and close at 4 pm EST (3 pm CST, 1 pm PST). Exchanges are also closed on certain holidays.
Now that you know how to go shopping for some hot new stocks, let's jump into initial public offerings.