David Clark Stock Research Paper

David Clark’s Television Program

November 13, 2006

Topic: Stocks

Reporter:

Many people are taking their financial matters into their own hands and trying out the stock market for themselves. But many do not know exactly how the markets function. Can you give us some background information about the U.S. markets?

David Clark:

Most shares of stock in the United States are traded on one of two distinctly different markets: organized exchanges and electronic markets. The largest, and most well-known U.S. market organized exchange is the New York Stock Exchange. The New York Stock Exchange is an actual, physical place where transactions occur. Prices are determined by specialists who are assigned specific stocks and work on the actual trading floor. They maintain a fair, competitive, orderly, and efficient market.

It has a global capitalization of $21 trillion, including $7.1 trillion in non-U.S. companies.

With the surge in publicly traded technology and Internet companies, electronic markets have grown in size. NASDAQ, a computerized over-the-counter exchange, has become one of the largest and most popular markets, widely quoted by the financial press. As opposed to the NYSE, the NASDAQ is not an actual place, but an electronic network over which transactions are conducted. Prices are determined by negotiation rather than by a specialist.

Founded in 1971, it lists about 3,200 companies — more than any other U.S. market — and on average trades more shares per day than any other U.S. market.

Reporter:

Now that we know more about the New York Stock Exchange and NASDAQ, what advice do you have for people to research stocks they might be interested in for investing?

David