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Major American Stock Exchanges

An overview of the primary market players and exchanges in the U.S.

What's a stock exchange, exactly? What's happening behind the scenes after you click "submit" to buy or sell stock? Many investors don't understand the role of stock exchanges in the overall stock market - but they should. These core players help generate the stock quotes we all rely on, filter market news of all kinds, and affect the stock price you receive on trades you execute with a broker.

Read on to learn more about major stock exchanges and how they impact the stock and option trading.

Meet the other market players

Before we talk about stock exchanges, it's important to point out the other players that comprise the stock market. Your brokerage firm may interact with some or all of these to execute your online stock trades. Here are a few players you should know:

Retail clients are investors and traders like you. They buy and sell stocks or options with their own money for personal profit. Retail investors use a brokerage firm, like TradeKing, to get their online stock trades executed.

Broker / dealers facilitate. We accept orders on behalf of our clients and get them executed at the best available price in the open market.

Institutional traders are professionals, buying and selling stocks and options with their firm's money, not personal funds. Not surprisingly, they tend to trade on a much bigger scale than individual investors.

"Market makers" are firms that agree to provide liquidity for specific stocks and options on those stocks. Usually they're assigned these securities by the stock exchanges. Market makers are then obligated to buy or sell - make a market - in those securities.

Introducing the stock exchanges

Stock exchanges (sometimes known as "bourses") are "places" - sometimes physical, sometimes virtual - where specialists and other market makers fill stock and options orders. Here are the major stock exchanges in the United States:

The New York Stock Exchange (now NYSE Euronext) is perhaps the best-known exchange in the U.S. and around the world. Its classic "open outcry" system of specialists, brokers and traders works in tandem with an electronic trading network.

The American Stock Exchange (AMEX) was recently acquired by the NYSE Euronext. Its claim to fame is pioneering many major Exchange Traded Funds (ETFs) like the SPDRs ("Spiders") and DIA ("Diamonds").

The Philadelphia Stock Exchange merged with the NASDAQ in 2008 but for years offered a major market for options and ETFs.

The Chicago Board Options Exchange (CBOE) is the U.S.'s biggest market for options and one of the largest worldwide.

The International Securities Exchange (ISE) is the world's largest equity options exchange and the first all-electronic options exchange in the United States.

The Nasdaq (National Association of Securities Dealers Automated Quotations) is the largest electronic equities market in the United States with more daily trading volume than any exchange in the world. It is also home to one of the mostly widely traded ETFs, the QQQQ ("the Q's" or "Qube").

Open an account with TradeKing today

When you compare online brokers, put TradeKing on your short list. TradeKing is an online broker with a simple mission: we help investors and traders like you become smarter, more empowered stock and options traders. At TradeKing we offer the same fair and simple price to all our clients - just $4.95 per trade, plus 65 cents or less per option contract. You'll trade at that price, no matter how often you trade, or how big or small your account may be.

SmartMoney Magazine ranked TradeKing the best discount broker in August 2007 - a distinction we've earned two years in a row. The SmartMoney survey evaluated brokerages based on commissions, interest rates, mutual funds, trading tools, investment products, research, banking amenities, and customer service.

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