Investing in American stock markets
There are many different stock exchanges worldwide. For example, close to home we know the Euronext Amsterdam. However, there are also big boys further away from home, such as in North America. Think for example of the New York Stock Exchange (NYSE) and the NASDAQ. These American stock exchanges are the main players in various newspaper articles on a daily basis. But what do you actually know about them? Below you can read 10 interesting facts about investing in the US markets.
Want to know more about stock exchanges in general? Read: explanation of the stock exchange .
Admission to the NSYE
A company is not allowed to list on the NYSE without further ado. It must be a seriously large company with a considerable amount of capital. The minimum limit is set at 1.1 million outstanding publicly traded shares . The market value of the company must be at least $100 million. For the NASDAQ, these figures are slightly different. The NASDAQ requires a minimum of 1.25 million outstanding publicly traded shares and a market value of at least $45 million. The minimum market value for the NASDAQ is therefore lower than for the NYSE.
‘The big board’ on the American stock exchange
The New York Stock Exchange can call itself the largest stock exchange in the world. The NYSE is therefore also called ‘The Big Board’. This stock exchange has been around for a while now. In 1792 it opened its doors on Wall Street, in the financial district of Downtown Manhattan (New York). A remarkable fact is that the Netherlands was the first country to open a physical stock exchange in 1602. The stock exchange in Amsterdam is considered the first stock exchange in the world.
FANG became FAANG
FANG and FAANG are not magic spells, but abbreviations for the most popular tech stocks within the NASDAQ. Many years ago, FANG was the standard. This stood for Facebook, Amazon, Netflix and Google. Since 2017, however, this acronym has been expanded with a second ‘A’. It was Apple that has since been added to this list.
Blue chips
Within the poker world, the ‘blue chip’ is a chip with the highest value. This term has been adopted in the investment world. When people talk about blue chip shares, they are talking about the larger companies that have a (very) long history. Think of classics such as Coca Cola and Apple. It was once an employee of the Dow Jones, Oliver Gingold, who first came up with the term blue chip. Since then, it has fallen under the widely used jargon.
Most Expensive Stock on the NYSE
Boss above boss; that’s what Warren Buffet must have thought as CEO of Berkshire Hathaway (BRK-A) when his investment company became the most expensive stock on the NYSE. It is not only the most expensive stock on the NYSE, it also qualifies as the most expensive stock in the world. Why is this stock so expensive? This has to do with the fact that part of the shares have never been split and will never be split. At the moment, one share of Berkshire Hathaway costs you around $360,000 (!). Can’t afford this? Fortunately, there is another option.
In addition to these A shares that cost a few hundred grand each, there are also so-called B shares. These cost about $240 each. Although such B shares were never really the intention, they were created due to the great demand. It should be said that B shares offer less than A shares. For example, you have (obviously) fewer voting rights and they can eventually be split. If you own 1 or more A shares, you can convert them to B shares if you wish. However, this does not work the other way around.
How many companies are on the NASDAQ100? Not 100
Within the US Markets, the NASDAQ100 index is an important link. It is said that the NASDAQ100 contains the 100 most traded NASDAQ companies, but this is not entirely true. There can be more than 100 companies in the NASDAQ100. Do you want to be considered a NASDAQ100 company as a NASDAQ company? Then you must of course be in the top 100 companies within the NASDAQ, but there are also additional (tricky) requirements.
Dow Jones index – American stock exchange
The Dow Jones Industrial Average (DJIA) was once founded by the editor of the Wall Street Journal, Charles Dow. Where does the Jones part come from? An employee of Charles Dow, named Edward Jones, participated in this founding. The Dow Jones Industrial Average represents the 30 largest companies of the NYSE and NASDAQ together.
Biggest Dow Jones price drop ever
It was just one single investor who caused the biggest drop in the Dow Jones ever. Within a few minutes, over 9% of the Dow Jones’ value evaporated. Ultimately, it turned out that this was caused by an algorithmic trade that took into account the trading volume, instead of the price. This led to a sell order of over $4.1 billion that was executed within 20 minutes. This crash of approximately 36 minutes, will go down in history as the ‘2010 flash crash’.
Shares in the NYSE itself
In 2006, it was possible to trade the New York Stock Exchange as such on the stock exchange. Later in 2007, the NYSE and Euronext merged with each other to form a European-American stock exchange company. Then, in 2013, a further step was taken. In this year, it was taken over by the Intercontinental Exchange (ICE). Today, around 12 stock exchanges are affiliated with this ICE. If you buy shares in NYSE:ICE, you actually own a small piece of NYSE.
No Jeans on the NYSE
The NYSE is quite strict when it comes to its dress code. Among other things, it states that jeans are not allowed on the trading floor (not even for guests). However, an exception was made once, in 2019 when Levi Strauss & Co. launched its IPO.
Investing in US stocks on the US markets
Are you interested in investing in the American markets? A broker can give you access to these and more foreign markets. Find a broker that suits you by using our broker comparator .
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