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Running Head : AMER and NASDAQ Comparison

AMER and NASDAQ Comparison

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Question No . 1

Both AMEX and NASDAQ are stock exchanges that have evolved from the demands of the times . AMEX or the American Stock Exchange started out as a stock exchange in the streets , or in the curb to be more precise dealing stocks of companies that are not important enough to be a member of the New York Stock Exchange (NYSE (Psst , n .d , para . 6 and 7 NASDAQ or National Association of Securities Dealers Automated

br Quotations System , on the other hand , was born after the advent of the computer age , answering the call of technology-based companies for a stock exchange of their own . Because of this , NASDAQ 's procedures differ from AMEX significantly (Psst , n .d , para . 8 and 9

Another similarity between the two exchanges is their common competitor the NYSE . The biggest companies are traded in the NYSE which accounts for its popularity . There are on-going plans to merge AMEX and NASDAQ in the quest of making a stock exchange that is more competitive with the ever popular NYSE (Psst , n .d , para . 12 . The two exchanges can compliment each other because of the different ways by which they conduct their business . These differences will be discussed in the later part of this

AMEX and NASDAQ each cater to a specific type of company . NASDAQ is by firms like Microsoft , Intel and Apple (Psst , n .d , para 9 . These companies are involved mainly in technology . They are more comfortable with the system used by NASDAQ since it is an exchange that uses computers in its operations . Since AMEX was created as an answer to companies who cannot get into the NYSE , AMEX listings include small and mid-cap companies , companies that are not qualified to join the NYSE AMEX has an impressive listing of options and exchange traded trusts AMEX specializes in energy companies , start-ups and biotech firms (Investigator guide staff , n .d , para . 1

Question No . 2

The differences between the operations of the two exchanges are many AMEX operations is similar to that of a traditional exchange . There is a floor where the buying and selling takes place . Buying and selling are done personally with buyers and sellers gesturing their offer and acceptance . The system is more personal , the buyers and sellers interacting face-to-face . In fact , AMEX started by trading in the curb only to move on to a building of its own with its own floor . NASDAQ uses electronics in its operations . NASDAQ does not have a trading floor where buyers and sellers meet to conduct trade . Buyers use telephones and computer terminals which contains the information on the securities being traded in real time . NASDAQ used to be considered as an Over the Counter Exchange , but as the term evolve over the years , NASDAQ is no longer considered as such . Initially , Over the Counter Exchanges ' are those which conduct trading without trading floors (Investigator guide staff , n .d...