The American Stock Exchange (AMEX)Let's take a look at the American Stock Exchange -- the third-largest stock exchange in the U.S. We'll also take a brief look at its history and working.
On October 1, 2008, NYSE Euronext -- the owners of the New York Stock Exchange (NYSE) -- acquired AMEX. The exchange is now called NYSE Amex Equities.
The AMEX started out in the 1840s at an outdoor curbstone on Broad Street near Exchange Place in New York. The curbstone brokers gathered around lamp posts and mail boxes, resisting wind and weather, putting up lists of stocks for sale. The curbstone brokers were willing to deal with stocks of smaller companies that couldn't meet the requirements to be listed on the Big Board -- the NYSE. Increase in trading led to high volumes of transactions. The shouting reached such a high level that stock hand signals had to be introduced so that the brokers could continue trading over the din. In 1921 the market was moved indoors into the building at 86 Trinity Place, Manhattan, where it still resides. The legacy hand signals endured for decades even after the move serving as a convenient means of communication. In 1953, the curbstone brokers changed their name from The New York Curb Exchange to The American Stock Exchange. In 1998, the AMEX merged with the National Association of Securities Dealers (NASD), the same organization that manages the NASDAQ stock market. The combined companies, however, continued to operate separate exchanges. Today, the AMEX is called NYSE Amex Equities after it was bought over by NYSE Euronext on October 1, 2008.
As an auction market, the AMEX conducts its business on a trading floor through brokers and specialists. Each security traded on the exchange is handled by a specialist, whose job it is to bring buyers and sellers together, and ensure that a fair market price is obtained for both parties. Although electronic trading is widely used, the exchange still prides its broker-intensive, floor trading. Brokers move around the floor, bringing buy and sell orders to the different specialists on behalf of their clients. Over the years the AMEX core business shifted from stocks to ETFs (Exchange Traded Funds).
In summary, the American Stock Exchange only recently came to be called NYSE Amex Equities. It is the third largest stock exchange in the U.S. and has a long, interesting history. This exchange usually lists smaller public companies and has been the pioneer for ETFs.
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