The Nasdaq and New York Stock Exchange (NYSE) are based in the US, but there are a lot of differences between the two. The NYSE is the oldest US exchange and still has a physical trading floor on Wall Street in New York City. The Nasdaq only operates electronically and tends to attract a lot of tech companies.
Let’s dive into the differences between both stock exchanges in terms of size, value, diversification and performance.
What’s the difference between the NASDAQ and the NYSE?
These are different stock exchanges with separate stocks are listed on each. Most trading platforms that offer access to one exchange also offer access to the other.
What’s the difference between an auction market and a dealer market?
The difference between these market types is the way that buyers and sellers communicate. In auction markets like the NYSE, trading happens directly between buyers and sellers.
In dealer markets there’s a “market maker” or broker who acts as a middleman between the buyer and seller. The market maker buys and sells securities to create liquidity and typically profits from the difference between the bid and ask price (known as the bid-ask spread).
10 popular stocks on the Nasdaq and NYSE
- Alphabet (C shares)
- Alphabet (A shares)
- Meta Platforms
- ASML Holding
- VF Corporation
- Johnson & Johnson
- Procter & Gamble
- JPMorgan Chase
- Bank of America Corporation
Nasdaq vs NYSE: Which is bigger?
“Bigger” can mean several things. It could refer to the number of stocks available or by the value of those stocks.
If you’re talking about the number of stocks, the Nasdaq is bigger with more than 3,500 stocks listed compared to roughly 2,400 stocks listed on the NYSE. This could change over time as new stocks are listed, existing stocks are unlisted and companies merge.
Nasdaq vs NYSE: Which is worth more?
The NYSE is worth more. It’s actually the largest stock exchange in the world by market capitalization, with the Nasdaq coming in second.
The Nasdaq has a market capitalization of $23.46 trillion. The NYSE has a market capitalization of $26.64 trillion USD—approximately 13% larger than the Nasdaq.
Nasdaq vs NYSE: Which is more diversified?
These stock exchanges have very different offerings. You can trade thousands of stocks on both exchanges, which allows for some industry and sector diversification, although you’d be lacking global diversification as all of your holdings will be US stocks.
The NYSE typically lists large-cap blue chip companies that are considered lower risk than many of the technology startup companies listed on Nasdaq. However, some technology companies on the Nasdaq have grown to the point of becoming blue chip companies.
It’s cheaper for companies to list on the NASDAQ by a significant margin, which is why you see a lot of initial public offerings (IPOs) taking place on the NASDAQ. You’re certainly more likely to see well established companies on the NYSE and smaller, newer companies on the Nasdaq.
Trading platforms that offer access to the Nasdaq and NYSE
These trading apps allow you to invest in companies listed on the Nasdaq and NYSE as well as funds/ETFs.
What’s the best Nasdaq index fund?
Here are some of the best performing Nasdaq funds according to JustETF.
|Icon||Fund||5-year performance||1-year performance (to May 2022)||Link to invest|
|iShares NASDAQ 100 (CNX1)||140.72%||3.37%||Buy on Interactive Brokers|
|Invesco NASDAQ 100 (EQSG)||N/A||5.87%||Buy on Interactive Brokers|
|Amundi NASDAQ 100 (ANXG)||147.14%||5.61%||Buy on Interactive Brokers|
|Xtrackers NASDAQ 100 (XNAQ)||N/A||3.46%||Buy on Interactive Brokers|
|Fidelity NASDAQ Composite (FNCMX)||96.87%||-9.55%||Buy on Interactive Brokers|
Popular stocks on the NYSE and Nasdaq
|Procter & Gamble||Amazon|
How to invest in the NYSE and Nasdaq
To invest in the NYSE and Nasdaq, choose individual stocks from either exchange as you see fit, or choose an index fund that holds some of the top stocks from both exchanges like the Nasdaq-100 or the NYSE US 100. Here’s how it works:
- Find an NYSE or Nasdaq ETF, index fund or mutual fund. Some index funds track the performance of all stocks on the index, whereas others only track a certain number of stocks or are weighted towards specific stocks. You should select the fund that best suits your investment goals.
- Open a stock trading account. To invest in ETFs or mutual funds, you’ll need to open a trading account with a broker or trading platform. Keep in mind that some index funds may only be available on certain brokerages or platforms. The providers in our comparison table let you invest in US stocks. Some of the index funds above are listed on the Toronto Stock Exchange (TSX).
- Deposit funds. You’ll need to deposit funds into your account to begin trading. You may need to pay a foreign conversion fee to convert your Canadian dollars into US dollars, so you can buy US stocks.
- Buy the index fund. Once your money has been deposited, you can buy the index fund. Most ETFs or index funds come with a small annual fee to cover fund management expenses.
The New York Stock Exchange and the Nasdaq use different trading models, list vastly different stocks and have different market capitalizations. The exchange on which you trade depends on the type of stocks you want to buy. The NYSE lists many low-risk blue chip companies, while the Nasdaq tends to list newer (and riskier) tech stocks.
Neither exchange is better than the other. Most providers that offer access to one exchange also offer access to the other. Choose stocks that you like from both exchanges, and consider diversifying by exploring stocks listed on exchanges in other countries.
Frequently asked questions
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