Page 118

where stocks are bought and sold by traders. The exchange is essentially an open auction market where buyers and sellers come together to trade stocks. In the US there are several stock exchange locations, including:

AMEX, American Stock Exchange (merged with NASDAQ stock market)
NYSE, New York Stock Exchange (a.k.a. The Big Board, reminiscent of the past when stock prices were written on a big chalk board)
Chicago Stock Exchange
Arizona Stock Exchange
Philadelphia Stock Exchange
Pacific Stock Exchange
Boston Stock Exchange
Cincinnati Stock Exchange

These exchanges are sometimes referred to as floor-based, as the stocks are bought and sold by dealers on the floor of a physical building. Of course most of us who trade stocks don't set foot on the floor of any exchange; the dealers work on behalf of the investors. Each company's stock is bought and sold through one person called the specialist whose job is to match and execute orders for that company's stock. Some of NYSE stocks are also traded in other exchanges. This is collectively referred to as composite trading. This is sometimes significant as a stock closing in New York at the end of the NYSE's trading day may still continue to be traded in other exchanges for some time after. Its true closing price would then be based on the composite trading rather than its closing price in NYSE.

In addition to the floor-based stock exchanges in the US, there exist another kind of system where stocks are traded over automated systems - computers. The National Association of Securities Dealers …