The NASDAQ is not based anywhere as it is a virtual exchange; there is no trading floor where you will see dealers. It is a network of computers linked together.
The NYSE or New York Stock Exchange; unlike the NASDAQ they use floor traders to make the trades. It is managed by a group of directors who are responsible for the conduct of their members; overseeing and setting the procedures and policies of the NYSE.
The AMEX stock market, which stands for American Stock Exchange, is the third largest stock exchange based on its trading volume in the United States. AMEX handles 10% of the securities that are traded in the United States.
Another function of stock exchanges is "Over the Counter Markets" or OTC. This is the trade in stocks and shares; some time called equity markets. This is mostly the listing of small companies and their stocks. There are two OTC exchanges they are Over the Counter Bulletin Board, OTCBB, and the Pink Sheets. When companies are dropped by the larger exchanges their stocks nearly always move on to these exchanges.
The stock market allows investors to buy and sell ownership shares of publicly traded companies. You can make money within the stock market in two different ways. The first is through capital gains and the second is through dividends.
When a company increases its capitol assists this intern produces a capitol gain. This increase will drive up the value of the company's shares. An investor makes money on the difference between the price they paid and the increased value of the share.
The payment of a part of the company's earnings is called a dividend. The board of directors make the decision which shares the dividend is paid on; rewarding these investors for risking their money. The dividend can be paid either in cash, property or stock.
Being a shareholder you become one of the many owners of a company. This gives you the right to a claim on all the company owns. You are entitled to a share in the company profits as well as the right to vote dependant if the stocks you have purchased through the stack market have voting rights included. The more stocks you own the more of the company you own and the more you can earn from the companies earnings.
There are 2 types of shares an investor can purchase; Common and Preferred shares. A common share has little preference with a company; for example should they decide to go into liquidation or become bankrupt the owners of common shares will not receive any capitol back until the creditors and preferred share holders are paid. Preferred share holders have this benefit however they do not have voting rights.
The stock market is a difficulty animal to understand; it can take a long time to grasp all the little quirks involved. By braking down the different section of the markets and focusing on understanding them individually it becomes much easier to grasp. Do not be daunted and take it a step at a time and you should master the markets.
