Trading Session

Categories: Trading

In New York, a gun goes off (ok, it's a buzzer or a bell) at 9:30 New York time. The trading session starts. Then, at 4 pm, the buzzer or bell hits again, and the trading session ends. That's a trading session at the NYSE.

But stocks trade all the time, all around the world, 24x7x365 in one form or another. (See: ECN.) So there is no such thing as a "globally attributable" trading session. Sessions only exist in context in narrow forms, on specific exchanges. And that's it.

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Finance: What are the NASDAQ and NYSE?74 Views

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Finance a la Shmoop. What are the NASDAQ and the NYSE? Nasdaq, yeah it stands for

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National Association of Securities Dealers Automated Quotation-systems. And [NASDAQ defined]

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yeah, it feels like they got cheated out of an S in there somewhere, like NASDAQ'S.

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That's what happens when life's on a budget. So NASDAQ is an electronic

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version of the original wall, as in Street, Wall Street, yah that. Where

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well-dressed folks would come with cash in hand scream out a stock and a price [stock market in 1900s]

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and then trade shares. They would trade for whatever was trending at the time. Like

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eyeball massagers, or wooden swimsuits, or motorised surfboards, all real things

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by the way. NASDAQ is the much more modern version of its predecessor NYSE.

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Is anything but nice when you lose money there. NYSE stands for New York

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Stock Exchange and it too was an outgrowth of the well-dressed folks at

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the wall. There are two key structural differences in the two trading systems,

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the NYSE is an actual physical place, has a physical location, address, etc. and this [NYSE Building]

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is what it looks like. NASDAQ is really a concept, a religion, a

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network, it's not really a place. At least not a geographic place. The other big

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difference is the manner in which shares are traded. The NYSE is an auction-based

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system, one individual is a buyer of AMZN at $983.25, he screams electronically

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that number and then buys from whoever is willing to sell at that price.

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Individuals buy from individuals. That's an auction market. But NASDAQ is a

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dealer market, that is somebody deals in the stock. They go out into the market[online stock market]

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and buy say a million shares of whatever.com that was bought in the market

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conveniently for exactly ten bucks even. That dealer now makes a market in that

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stock, ie the dealer is kind of you know, their own individual market. And she

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moves with the market to manage the spread in the trades. Like she might have

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a narrow spread, where she's a buyer of the stock at $10.02 and a seller of the

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stock at $10.07 a share. Or it's a really wild volatile stock, on a wild and [man and woman on rollercoaster]

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volatile day, she might be a buyer only at $9.90 and a seller at $10.30, making 40

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cents a share trade. Well you could do the fancy math that if she

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keeps her inventory steady at a million shares and trades a million shares that

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day. Well with that spread she makes 40 cents times a million or 400 grand for

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the day's efforts. However after staring at a screen all day she's gonna have to

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spend at least some of that money on eye care. [woman in office]

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Thank goodness for those eyeball massagers.

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