US Stock Market Introduction

Introduction of major US stock exchanges
  • New York Stock Exchange (NYSE)
Founded in 1792, it is the oldest, largest and most famous securities market in the United States, with more than 3,500 listed companies. The listing conditions of the New York Stock Exchange are relatively strict. Most of the top 500 companies with a long history are listed on the New York Stock Exchange, such as: General Electric (GE), Exxon Mobil (XOM), Citigroup (C) and Coca-Cola (KO) etc.

  • Nasdaq Stock Exchange ( Nasdaq )
Founded in 1971, it is now the second largest stock exchange in the world and a major trading center for high-tech stocks in the United States. Currently, there are about 5,400 companies listed, most of which are belong to high-tech industries, such as: Apple (AAPL), NVIDIA (NVDA), Tesla (TSLA), Microsoft (MSFT), etc.

  • OTC Markets
Also known as the over-the-counter market. Unlike exchanges, OTC has no fixed venue, no prescribed membership, no strict and controllable rules and regulations, no prescribed trading products and restrictions. It is the one-to-one transaction mainly conduct between a pair of counterparties through private negotiation.

The influential OTC markets include the U.S. Over-the-Counter Bulletin Board (OTCBB), Pink Sheets... The United States has a huge OTC market, and the number of securities traded in these markets for about three-quarters of the U.S. securities trading volume.

--Over-the-counter bulletin board (OTCBB)
OTCBB (Over-the-Counter Bulletin Board), is a trading intermediary system managed by the National Association of Securities Dealers (NASD), the manager of NASDAQ.

The difference from NASDAQ is that OTCBB has no listing conditions and standards, does not provide an automatic transaction execution system, and does not have a relationship with securities issuers.

The typical features of OTCBB are fragmentation, small scale, simple listing process and lower fees. OTCBB has few large funds and institutional investors, and investors are mainly small funds and individual investors.

--Pink Sheets
Quoted on the Pink Sheet Market are those "Unlisted Securities", including:

1. Securities delisted from the exchange because they no longer meet the listing criteria;
2. Securities returned from OTCBB to pink sheet market;
3. Other securities for which at least one market maker is willing to quote.
Unlike enterprises that traded on stock exchanges, enterprises in the pink sheet market do not have to meet the minimum requirements or submit relevant documents such as financial reports to the SEC. The threshold is extremely low, mostly because the companies themselves are unable to provide regularly financial reports or major event reports, and are forced to be delisted. Therefore, the pink sheet market is riskier.

Introduction to the three major U.S. stock indexes
  • Standard & Poor’s 500 Index, S&P 500
The S&P 500 index includes the 500 largest listed companies in the United States, accounting for about 80% capitalization of the total U.S. stock market. It can well measure the performance of large cap stocks of the U.S. and is the most representative indicator of the U.S. stock market. Such as: Campbell Soup Company (CPB), Ford Motor (F), Goldman Sachs (GS)... The S&P500 Index adopts "Float-Adjusted Market Cap Weighted", which can better reflect the actual importance of the company's stock in the stock market, can show the rise and fall of the US economy.

  • Dow Jones Industrial Average Index
The Dow Jones Industrial Index is composed of the 30 most well-known blue chips in the United States, which are usually leaders in various industries, such as Apple (AAPL), Disney (DIS), Nike (NKE)... The Dow Jones Industrial Index is "Price Weighted" rather than "Market Cap Weighted" , which makes high-priced stocks in the index more influential than low-priced stocks, even though high-priced stocks are not necessarily more valuable than low-priced stocks. It represents the trend of "U.S. blue chips".

  • NASDAQ Composite Index
The constituent stocks of the NASDAQ Composite Index are all companies listed on the Nasdaq Exchange (NASDAQ) in the United States, which are weighted by their float-adjusted market cap. Therefore, technology stocks around the world are also focused on Nasdaq Composite Index.

US Stock Market Introduction

Introduction of major US stock exchanges

  • New York Stock Exchange (NYSE)
  • Founded in 1792, it is the oldest, largest and most famous securities market in the United States, with more than 3,500 listed companies. The listing conditions of the New York Stock Exchange are relatively strict. Most of the top 500 companies with a long history are listed on the New York Stock Exchange, such as: General Electric (GE), Exxon Mobil (XOM), Citigroup (C) and Coca-Cola (KO) etc.

  • Nasdaq Stock Exchange ( Nasdaq )
  • Founded in 1971, it is now the second largest stock exchange in the world and a major trading center for high-tech stocks in the United States. Currently, there are about 5,400 companies listed, most of which are belong to high-tech industries, such as: Apple (AAPL), NVIDIA (NVDA), Tesla (TSLA), Microsoft (MSFT), etc.

  • OTC Markets
Also known as the over-the-counter market. Unlike exchanges, OTC has no fixed venue, no prescribed membership, no strict and controllable rules and regulations, no prescribed trading products and restrictions. It is the one-to-one transaction mainly conduct between a pair of counterparties through private negotiation.
The influential OTC markets include the U.S. Over-the-Counter Bulletin Board (OTCBB), Pink Sheets... The United States has a huge OTC market, and the number of securities traded in these markets for about three-quarters of the U.S. securities trading volume.

    ——Over-the-counter bulletin board(OTCBB)
OTCBB (Over-the-Counter Bulletin Board), is a trading intermediary system managed by the National Association of Securities Dealers (NASD), the manager of NASDAQ.

The difference from NASDAQ is that OTCBB has no listing conditions and standards, does not provide an automatic transaction execution system, and does not have a relationship with securities issuers.

The typical features of OTCBB are fragmentation, small scale, simple listing process and lower fees. OTCBB has few large funds and institutional investors, and investors are mainly small funds and individual investors.

    ——Pink Sheets
Quoted on the Pink Sheet Market are those "Unlisted Securities", including:
1. Securities delisted from the exchange because they no longer meet the listing criteria;2. Securities returned from OTCBB to pink sheet market;3. Other securities for which at least one market maker is willing to quote.Unlike enterprises that traded on stock exchanges, enterprises in the pink sheet market do not have to meet the minimum requirements or submit relevant documents such as financial reports to the SEC. The threshold is extremely low, mostly because the companies themselves are unable to provide regularly financial reports or major event reports, and are forced to be delisted. Therefore, the pink sheet market is riskier.

Introduction to the three major U.S. stock indexes

  • Standard & Poor’s 500 Index, S&P 500
The S&P 500 index includes the 500 largest listed companies in the United States, accounting for about 80% capitalization of the total U.S. stock market. It can well measure the performance of large cap stocks of the U.S. and is the most representative indicator of the U.S. stock market. Such as: Campbell Soup Company (CPB), Ford Motor (F), Goldman Sachs (GS)... The S&P500 Index adopts "Float-Adjusted Market Cap Weighted", which can better reflect the actual importance of the company's stock in the stock market, can show the rise and fall of the US economy.


  • Dow Jones Industrial Average Index
    The Dow Jones Industrial Index is composed of the 30 most well-known blue chips in the United States, which are usually leaders in various industries, such as Apple (AAPL), Disney (DIS), Nike (NKE)... The Dow Jones Industrial Index is "Price Weighted" rather than "Market Cap Weighted" , which makes high-priced stocks in the index more influential than low-priced stocks, even though high-priced stocks are not necessarily more valuable than low-priced stocks. It represents the trend of "U.S. blue chips".

  • NASDAQ Composite Index
    The constituent stocks of the NASDAQ Composite Index are all companies listed on the Nasdaq Exchange (NASDAQ) in the United States, which are weighted by their float-adjusted market cap. Therefore, technology stocks around the world are also focused on Nasdaq Composite Index.