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The Stock Market &
The New York Stock Exchange
By Adam
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A stock exchange is a place where brokers buy and sell stocks for their customers. There are many stock exchanges throughout the world. The largest one is the New York Stock Exchange, often called the NYSE. It began exchanging stocks in 1792. In that year, 24 brokers got together under a buttonwood tree and signed a contract vowing that they would trade only with one another. It became known as the Buttonwood Agreement. Can you guess why?
From this the NYSE has grown into the largest exchange in the world. It is located on 18 Broad Street. Six marble columns are on the outside of the building. It has 16 separate trading floors. Electronic boards on two of the walls give the latest information on the stock values. These big boards may have helped give the
exchange its nickname-the Big Board.
But no one can predict the market as the "Crash of '87" shows. What began as a downward
slide in 1987, turned into a landslide as more investors cashed in sell orders. The trading floor had to be shut down four times that day because the volume of sell orders was
overwhelming. This further added to the panic. By the end of the day, $500 billion in stock value had disappeared. This time,
investors blamed automatic selling programs as the cause. Basically Citations Books & Web Sites
Kent, Zachary. The Story of the New York Stock Exchange.
Chicago: Children's Press, 1990.
Images Images of stock ticker, bull, bear, crowd of people, buy & sell and bag of gold from "Microsoft Office Online" <http://office.microsoft.com/clipart/default.aspx?cag=1> Images free for non-profit and personal use. (October-February, 2003-2004). Glossary Brokers: Brokers are people that sell, trade and buy stocks for their investors. Return Stocks: Stocks are shares of a company that investors tell their brokers to buy when the prices are low. Investors do this in hope that the value of the purchased stock will go up so that investors can sell it for a higher price than they bought it for, making a profit. Return Bull Market: A time when investors think that the market will go up. This term may have come from the fact that bulls thrust upward with their horns. Return Bear Market: A time when investors think that the market will go down. This term may have come from the fact that bears push downward with their paws. Return |Basic World Economy | Types of Economies | Money Around the World |Free Enterprise| Supply and Demand| Depression and Recession| Coins and Minting| Paper Money| Protecting Money | Making, Saving, and Spending Money| Banking and Checking Accounts| Federal Reserve and Taxes| Counterfeiting| The Stock Market and New York Stock Exchange| |
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the Great Depression. What lead up to the Great Depression was the Roaring Twenties. Basically, this was a bear market period after World War I when the country was experiencing a
huge growth period. Everyone became convinced they would double or triple their money in the stock market. People bought on margin. This way the investor needed to pay for only 10% of the stock and borrow the rest. The
craziness caused stock prices to go higher and higher. On October 29, prices
began to fall and brokers could not keep up with sell orders. Brokers called investors
and asked for payments of margin loans. "Stock prices virtually
collapsed yesterday," said The New York Times on October 30, 1929. Millions of investors were ruined
.
these were orders to sell stocks if they fell to a certain price. When all stock prices started to drop, automatic sell orders started selling everything. The strong economy at the time kept the country from another great depression.