The New York Stock Exchange (NYSE) contains the oldest, largest, and best-known companies To be listed (traded) on the NYSE each company must have a pre-tax earning of $2.5 million, with a minimum market value of $18 million for its shares.
The American Exchange (AMEX) consists of mid-sized companies. Each company listed (traded) on the AMEX has a minimum of 500,000 shares publicly held with a minimum value of $3 million for these shares.
The Over The Counter exchange usually contain the smaller and/or newer companies with very few shares available for trading. These companies are also more volatile than those that are listed (traded) on the NYSE or the AMEX.
Companies listed (traded on the OTC) range from corporate giants (Microsoft) to smaller emerging firms (Shoe Carnival). Many of the companies listed on the OTC vary in size and are usually in the fields of technology, telecommunications, banking, retail, and other growth sectors. To be listed (traded) on the OTC, the companies must also have a minimum of 500,000 shares, that are publicly held, and have a value of $3 million for those shares.
The NYSE and the AMEX are private associations that sell memberships. The NYSE has 2,755 members, the AMEX 796, and the OTC 28,000+ members. Generally the value of a seat rises as stock prices and trading volume rise. When the markets are in turmoil or when competition increases and commissions decrease, the price fluctuates. The cost of a seat on the New York Stock Exchange is over $1,500,000.
The above article was taken from the Evansville Courier Company. Watch each week for more background information about the stock market.