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Globalization

Effect of Globalization on NYSE

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Effect of Globalization on NYSE

It is needless to say that the condition of the global economy is very significant for NYSE particularly for large American corporations that are incorporated in the major indices. The reason for that is globalization. The level of interdependence and integration of both domestic and international markets is astounding. Since the 1980 the global after-tax corporate profits have increased up to 31% more rapidly than global GDP, American corporations saw their after-tax margins rise by 66% over the past three decades. This profit boom can be attributed to privatization and deregulation that spread around the world due to globalization. However, any downturn in the global economy affects many global corporations. Globalization has changed how things in the NYSE run since it has domestic and international listings which are integrated into the global economy. The stats below show how NYSE has listed international firms in different parts of the world (“International Listings | International Companies at NYSE”);

 

 

 

The Stats above show the NYSE listing of International firms

Electronic Trading

Virtually all the stock trade happening in the NYSE is made electronically. “The days of men with questionable jacket colors screaming and making hand gestures at each other on a stock trading floor are a relic of a bygone era” (Kranc). The modern era began in 1969 with the creation of the first Electronic Communication Network that permitted traders to buy and sell stocks after hours. The nature of NASDAQ in 1971 upped the game. NASDAQ initially posted offers and bids on the electronic bulletin board; however, it later began to perform its duty as an automated trading system. Subsequently, NYSE created more advanced electronic systems like the Designated Order Turnaround (DOT) system and the SuperDOT system in the 1980s (Kranc). The 1990s saw the skyrocketing of electronic and online trading due to the internet revolution.

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The 2000s saw more significant use of supercomputers, which could perform incredible calculations by the microsecond. All this has allowed for High-Frequency Trading. The SEC has made it mandatory through its regulations NYSE to go entirely electronic due to the sophistication and the number of trades carried out in the NYSE.

Specialists in NYSE and their roles

Specialists play an important role in NYSE just like an aircraft controller in an airport. Though, NYSE has embraced technology and innovation through electronic trading their roles are still important (Detrixhe). A specialist facilitates trading in particular stocks. They make a market in the stock they trade by showing their best bid and ask prices to the market during trading. They also play the role of maintaining fair and orderly market in stocks traded by them by using their capital to reduce market volatility during times of insufficient buyers or sellers. The number of stocks traded by a specialist will depend on the activeness of the stock. Many specialists trade between five and ten stocks.

Relationship between NYSE and Personal Finance

In my quest to become an investor, I believe learning about exchanges and the stock market is an important way to go. The NYSE topic helps me understand the concept of stock trading and the stock market in general. I have learned about the NYSE exchange works and how stocks can be affected positively or negatively due to factors affecting the global economy. I plan to invest in the stock market and the information about NYSE is important in my quest to fulfill my future financial goals.

Conclusion

The New York Stock Exchange has had a colorful and rich history in its mission to facilitate high quality service and market quality. It has been build today into an embodiment of technology and the world financial system. The Exchange has expanded year in year out and one can only leave to imagination how it will be decades to come.

 

 

 

 

 

Works Cited

“New York Stock Exchange: A-Z Company Listing:”. Advfn.Com, 2016, https://www.advfn.com/nyse/newyorkstockexchange.asp.

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