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.
The Nasdaq is completely electronic, while the NYSE has a physical trading floor on Wall Street. The NYSE is an auction market, and the Nasdaq is a dealer market.
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).
“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.
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What’s the best Nasdaq index fund?
Here are some of the best performing Nasdaq funds according to JustETF.
If you’re choosing between the 2, stocks on the Nasdaq could be seen as exciting and therefore more appetizing. But the best way to invest would be to create a diversified portfolio that includes stocks from both exchanges—this way, you have a nice mix of well established companies and newer technology companies or startups.
There’s no reason why you’d need to pick one of these exchanges over another, as both could be great in creating a portfolio with a diverse range of investments.
Popular stocks on the NYSE and Nasdaq
NYSE
Nasdaq
VF Corporation
Apple
Walmart
Microsoft
Procter & Gamble
Amazon
JPMorgan Chase
Tesla
Exxon
Nvidia
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.
Bottom line
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.
The Nasdaq lists more stocks than the NYSE. But the NYSE has a higher market capitalization, exceeding the Nasdaq’s market cap by approximately 13%.
It’s cheaper to list on the Nasdaq, which could be a key reason why so many companies go public on that exchange. The NYSE used to be known as the exchange for large and well established companies, while the Nasdaq was known to accept smaller companies.
Yes, companies can choose to list stocks on more than 1 exchange. This is known as a dual listing.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Zoe was a senior writer at Finder specialising in investment and banking, and during this time, she joined the Women in FinTech Powerlist 2022. She is currently a senior money writer at Be Clever With Your Cash. Zoe has a BA in English literature and a Diploma for Financial Advisers. She has several years of experience in writing about all things personal finance. Zoe has a particular love for spreadsheets, having also worked as a management accountant. In her spare time, you’ll find Zoe skating at her local ice rink. See full bio
Zoe's expertise
Zoe has written 18 Finder guides across topics including:
A failed SPAC deal pulled the plug on this vertical farming company’s plans to go public. But you can buy stock in other sustainable farming companies.
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