NASDAQ vs. NYSE: What is the difference between NASDAQ and NYSE?

NASDAQ vs. NYSE: In This Article We Will Discover The Key Differences Between NASDAQ and NYSE, Their Similarities, Pros & Cons, And Answer Some Of The Frequently Asked Questions (FAQ)
NASDAQ vs. NYSE: Key Differences, Pros & Cons, FAQ

NASDAQ vs. NYSE are the two largest stock exchanges in the world holding 46% of the global stock market value. The biggest difference between NYSE and NASDAQ lies in the way trading deals are fulfilled at them. While NYSE allows stock transactions directly between individuals, NASDAQ offers stock dealings only through a dealer.

Considering the definitions of NYSE and NASDAQ for clarity

What is the NASDAQ?

National Association of Securities Dealers Automated Quotations (NASDAQ) is an American stock exchange that allows electronic stock dealings globally without a physical trading floor. It is the world’s first electronic stock market.

What is NYSE?

New York Stock Exchange (NYSE) is an American stock exchange that allows the exchange of stocks globally and also has a physical trading floor in New York City. It is the world’s largest stock exchange with the combined market capitalization of its listed companies being the highest.

Listing NASDAQ vs. NYSE pros and cons for further differentiation

Pros of NASDAQ

  • It has some of the fastest moving stocks for active trading.
  • It has a lower listing cost.
  • It carries a wider mix of stocks from large, small, and micro organizations.

Cons of NASDAQ

  • It has limited options for stocks with more stable movements.
  • It doesn’t have a physical trading floor.

Pros of NYSE

  • It offers many slow-moving but growth-oriented stocks for an investor.
  • It has a physical trading floor.
  • It majorly carries the stocks of some of the largest publicly-traded companies.

Cons of NYSE

  • You won’t find many fast-moving stocks for active trading here.
  • It has a higher listing cost.

Looking at the similarities between the two biggest stock exchanges

  • Both NASDAQ and NYSE use market makers to maintain fair trading and ease of liquidity. 
  • Both NASDAQ and NYSE are listed companies and thus, traded publicly.
  • The regulatory framework of both NASDAQ and NYSE is overseen by the Securities and Exchange Commission.
  • Both exchanges have their traffic controllers that play a crucial role in ensuring just and fair trading at all times. 

Why do companies choose NASDAQ over NYSE?

The biggest reason for companies choosing NASDAQ over NYSE is the cost of listing. It is around 70-80% lesser on NASDAQ. This has made it attract IPOs from riskier yet growth-oriented start-ups.

How does NASDAQ differ from the NYSE?

NASDAQ differs from NYSE in terms of principles of working, types of securities listed, listing cost structure, number of the companies listed, indices, and basic working infrastructure. Where NASDAQ is the electronic version of a stock market, NYSE retains the traditional floor trading along with e-trading facilities. 

Is it better to invest in the NYSE or NASDAQ?

Both the NYSE and NASDAQ are great picks. For investors who are willing to take risks, it is always better to pick a stock from NASDAQ as it has listings of companies that are innovative yet growth-driven. For example, Facebook, Amazon, Google, et al. That said, the stocks are more volatile. 

For investors who like to play it safe, sticking to NYSE stocks is the best deal. It has more established companies with consistent growth. 

Is Apple on NYSE or NASDAQ? 

Apple is listed on NASDAQ like many other tech companies with dramatic movement in stock prices.

Is Dow NYSE or NASDAQ?

Considering NYSE vs. NASDAQ vs. Dow, NYSE and NASDAQ are stock exchanges while Dow is an index helping the investors determine the direction of stock prices. It groups the prices of 30 influential stocks of NYSE and NASDAQ to measure their performance.

Can stock be listed both on NYSE and NASDAQ?

Yes, a company can list its stock on both NYSE and NASDAQ. This dual-listing requires the company to pay the fee associated with each exchange and meet all the concerned listing requirements as well.

What is the difference between NASDAQ and NYSE?

BasisNASDAQNYSE
Full formNASDAQ is short for the National Association of Securities Dealers Automated Quotations.NYSE is short of the New York Stock Exchange.
IncorporationIt was incorporated in the year 1971.It was founded in 1792.
Trading floorNASDAQ doesn’t have a physical trading floor and is operated electronically.NYSE has a physical trading floor on Wall Street in New York City.
Fundamental principleNASDAQ is a dealer market where buyers and sellers deal through a dealer (market maker). They do not transact directly.NYSE is an auction market where buy and sell bids are matched at the opening and closing of the market electronically to settle deals.
Types of stocksThe listed securities are more volatile and also growth-oriented. For example, technology or innovation.The listed securities are more stable and established for decades. For example, blue-chip or FMCG.
TiersNasdaq has 3 tiers namely; NASDAQ Capital Market, NASDAQ Select Market, and NASDAQ Global Market. NYSE works on a single-tier mechanism. 
ListingTo get listed on NASDAQ, one must expect to pay a minimum of $50,000 which may go as high as $3,20,000 depending on the fact which tier of all 3, one is applying for. It updates every year.To get listed on NYSE, the fees may range anywhere between $1,50,000 to $5,00,000, with regular yearly updates. 
Annual chargeThe annual charges may range from $44,000 to $1,63,000 depending on the tier.The annual charges on NYSE $0.0013 per share or $71,000, whichever is higher.
Market capitalizationIt has a market cap of around $17.2 trillion.It has a market cap of around $25 trillion.
Number of listed companiesIt has around 3300 companies listed on it, with more additions regularly.It has around 2800 companies listed with an ever-growing number.

Comparison Chart

NASDAQ vs. NYSE: In This Article We Will Discover The Key Differences Between NASDAQ and NYSE, Their Similarities, Pros & Cons, And Answer Some Of The Frequently Asked Questions (FAQ)

Comparison Video

What is the difference between NYSE and NASDAQ?

Which is better between NYSE and NASDAQ for a trader?

Choosing to trade on NYSE or NASDAQ depends on your trading goals. If you would like to invest or trade in more stable stocks, NYSE would be a better option for you. If, however, you want to trade rigorously in stocks with rapid price movements, choosing NASDAQ over NYSE is recommended.

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