Equity Securities (part 2)
Equity Trading – Is the process of buying and selling company shares on the stock market or there trading platforms.
NASDAQ STOCK MARKET - The NASDAQ is a major stock market index in the United States. It represents the
performance of a large number of publicly traded companies, particularly those in the technology and internet
sectors.
1. Nasdaq Composite Index (COMP): The Nasdaq Composite Index is a benchmark that tracks the stock
prices of more than 3,000 companies listed on the Nasdaq stock exchange. These companies include
tech giants, biotech firms, and other innovative companies. The index is weighted by market
capitalization, meaning that larger companies have a greater impact on its movement.
2. Technology Focus: The Nasdaq is known for its heavy concentration of technology-related companies. It
includes well-known names like Apple, Microsoft, Amazon, Google (Alphabet), and Facebook. These
companies play a significant role in shaping the global economy and are often at the forefront of
innovation.
3. Market Updates and News: Nasdaq provides real-time updates, reports, and news on the US and global
stock markets. It covers insights on technology, innovation, and cryptocurrencies. Investors and traders
rely on Nasdaq for information about stock prices, trends, and market developments.
4. Trading Hours: The Nasdaq stock market operates during regular trading hours from 9:30 AM to 4:00
PM Eastern Time (ET). It also has pre-market and after-hours trading sessions.
5. Nasdaq Data Link: Nasdaq Data Link is a marketplace for financial, economic, and alternative data
delivered in modern formats for analysts. It provides access to a wide range of data, including historical
stock prices, economic indicators, and more.
New York Stock Exchange (NYSE) - The New York Stock Exchange (NYSE) is the world’s largest stock exchange,
with the market capitalization of its listed companies clocking in at a whopping $23 trillion. More than 80% of
the companies in the S&P 500 index are traded on the NYSE
- The NYSE is a stock exchange where the equity shares of public companies are bought and sold. The
NYSE uses an auction-based system in which brokers auction shares of stock for the highest price they
can get, either on a physical trading floor or an electronic system.
- the NYSE offered both electronic trading and floor trading at its physical location in New York, N.Y. In
March 2020, however, it closed floor trading to the pandemic and shifted all transactions to an
electronic format. As of early April 2021, physical trading has not returned to the NYSE.
Global Stock Market – Global stock market is the collective term for all the stock exchanges and markets
around the world that trade stocks, bonds, commodities, and currencies.
- The stock market allows buyers and sellers of securities to meet, interact, and transact. The markets
allow for price discovery for shares of corporations and serve as a barometer for the overall economy.
Buyers and sellers are assured of a fair price, high degree of liquidity, and transparency as market
participants compete in the open market.
American Depository Receipt - An American depositary receipt (ADR) is a security that represents
indirect ownership of shares of a foreign company that isn't directly traded on U.S. exchanges. American
banks purchase the shares through their foreign branches and make them available to investors in the
U.S.
Banks and other financial institutions can purchase shares of foreign companies through their
foreign branches. Then, they sell ADRs in the U.S. as a form of indirect ownership. These ADRs
entitle the purchaser to the foreign stock they represent, even though the bank still has title to
the underlying stock.
Advantage and Disadvantage
What We Like:
Easy to use
Available through your U.S. broker
USD-based pricing
Trade on U.S. market hours
What We Don't Like:
Limited selection of securities
Poor liquidity
Exchange rate fluctuations
Difficult to diversify
Higher fees
