Lesson 2 – Stock market index, NYSE, NASDAQ

Stock market index

A stock index or stock market index is a method of measuring the value of a section of the stock market. It is computed from the prices of selected stocks (typically a weighted average). It is a tool used by investors and financial managers to describe the market, and to compare the return on specific investments.

An index is a mathematical construct, so it may not be invested in directly. But many mutual funds and exchange-traded funds attempt to “track” an index , and those funds that do not may be judged against those that do.

Two of the most famous indexes are NASDAQ and NYSE:

NASDAQ index

The NASDAQ Stock Market, commonly known as the NASDAQ, is an American stock exchange. It is the second-largest stock exchange in the world by market capitalization, after the New York Stock Exchange. The exchange platform is owned by NASDAQ OMX Group, which also owns the OMX stock market network.

New York Stock Exchange (NYSE)

The New York Stock Exchange (NYSE), sometimes known as the “Big Board“, is a stock exchange located at 11 Wall Street,Lower Manhattan, New York City, New York, United States. It is by far the world’s largest stock exchange by market capitalization of its listed companies at US$16.613 trillion as of May 2013. Average daily trading value was approximately US$169 billion in 2013.

The NYSE trading floor is located at 11 Wall Street and is composed of four rooms used for the facilitation of trading. A fifth trading room, located at 30 Broad Street, was closed in February 2007. The main building, located at 18 Broad Street, between the corners of Wall Street and Exchange Place, was designated a National Historic Landmark in 1978, as was the 11 Wall Street building.

Next: Lesson 3 – Stock brokers Bonds and Mutual funds