Legal Definitions - New York Stock Exchange

The New York Stock Exchange (NYSE) is a leading financial marketplace in the United States where shares of large, established companies are bought and sold. It serves as a central platform where individuals and institutions, through their brokerage firms, can trade various securities. The NYSE is renowned for listing companies that meet stringent requirements, often including a significant number of outstanding shares, making it a key indicator of the health and performance of major corporations.

• Example 1: Company Listing for Public Trading
  Imagine Global Innovations Inc., a well-established technology firm with millions of shares, decides to make its stock available to the public for the first time or to switch its listing from another exchange. To gain the prestige and access to a vast pool of investors, it applies to have its shares traded on the NYSE. Once approved, investors worldwide can buy and sell Global Innovations Inc. stock through their brokers on this exchange.

  Explanation: This illustrates the NYSE as the chosen platform for large, prominent companies to list their shares, making them accessible for public trading and benefiting from the exchange's reputation and liquidity.

• Example 2: Individual Investor Buying Shares
  Sarah, an individual investor, wants to buy shares in Evergreen Energy Corp., a large utility company she believes has strong growth potential. She uses her online brokerage account (which is affiliated with a member firm of the NYSE) to place an order. Her brokerage firm then executes the trade on the NYSE, connecting her purchase with a seller of Evergreen Energy Corp. shares.

  Explanation: This demonstrates how the NYSE facilitates the actual buying and selling of securities for individual investors, with member brokerage firms acting as intermediaries to execute these transactions on the exchange.

• Example 3: Market Performance and Economic Indicators
  During a quarterly earnings report season, financial news channels frequently report on how companies listed on the NYSE are performing. For instance, if major industrial giants like Titan Manufacturing Co. and Apex Financial Group, both traded on the NYSE, announce strong profits, it often contributes to an overall positive trend for the "Dow Jones Industrial Average," an index heavily influenced by NYSE-listed companies.

  Explanation: This highlights the NYSE's role as a central hub for trading the shares of many of the largest and most influential U.S. companies, making its overall activity and the performance of its listed firms a significant indicator of broader economic health and market sentiment.