Life As An Investment Banker

Posted onNovember 25, 2011 - 10:11 am by Admin | 0 Comments

The first known stock certificate was issued in 1606 in Holland. It was for shares in a company that traded spices and other goods from India. Like modern stock, it represented a share of ownership in a company. Today, there is an average of 1.46 billion stock shares traded per day, worth approximately 46.1 billion dollars; each of them still representing a small ownership in a large company.

The Basics of the Stock Market

There are three primary exchanges in the United States:

The NYSE: The New York Stock Exchange. Located in a building at 40 Wall Street in New York City, this is the original American Exchange. It started in the 1700s on the corner of Wall and Broad Streets. This informal market started out as a group of people meeting on an open street corner. In 1792 the Buttonwood agreement was signed, bringing to life the New York Stock and Securities Board which later became the NYSE. In 1817, it moved into a small rented room which has later become the modern stock exchange building. To trade, an investor would be required to purchase a seat on the exchange. If an investor did not have a seat on the exchange, someone who did would trade for the investor. Thus, the stockbroker was born.

The AMEX: The American Stock Exchange. The exchange started in 1842 as the New York Curb exchange and was later renamed. Its meetings took place outside the NYSE. It remained on the street until 1921, when it moved into offices on Trinity place in New York City.

The NASDAQ:The National Association of Securities Dealers Automated Quotations. This market began in 1971 and, for its time, was revolutionary. It was the first market based on the principles of the NYSE that did not occupy a specific geographic location. The NASDAQ was and is entirely computer run. The stocks traded on the NASDAQ are called “OTC” which means “over the counter”. They do not have to be registered to be traded and no one is required to have a seat on the exchange in order to trade in this market.

Stocks: Stock is what is bought and sold on all of these exchanges. An investor buys a share of stock and that share represents ownership of the company. If an investor buys a share of stock worth $1 from a company worth $100, the investor now owns 1% of that company. Stocks are also referred to as equity because an investor now has equity in a company.


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