Amex and NASDAQ are two very powerful companies based on the Stock Market Essay

Amex and NASDAQ are two very powerful companies based on the Stock Market. Both are very similar and yet have their own uniqueness.

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Amex is better known as the American Stock Exchange. Amex is used by investors in the stock market to find a resource and understanding of an investment. Amex is used mostly by individuals but also by institutional investors.  “Amex uses a wide variety of listed equities, an extensive options market , and an unrivaled listing of more than 100 exchange traded funds (ETFs), the securities category pioneered by the American Stock Exchange.” (

ASDAQ is better known as National Association of Securities Dealers Automated Quotations System.   It is a market where stocks are exchanged. It is mostly corporate exchanges and mainly deals with technology.

Both Amex and NASDAQ are similar in which they are both companies that are based on the stock market. Both handle major clients and many different exchanges. Both also deal with the buying and selling of stocks. Each is widely known and capitalizes on their investors.

However there is a difference also.  NASDAQ is more of a corporate’s corporation. It handles mostly technological clients and uses technology to their advantage. NASDAQ electronically handles everything. Amex on the other hands likes to be more personable and does not handle everything electronically.  Amex uses floor exchanged and is thought to be slower in handling things. “The American Stock Exchange say they’ll never give up their floor-based specialists but NASDAQ believes they’ll wake up to reality and go completely electronic.” (Stewart) NASDAQ is extremely competitive and continues to try to find way to better its company. “Robert Schwartz, professor of finance at Baruch College, the debate’s moderator, started by outlining the forces of change: technology, regulation and competition. ‘Change just keeps on happening, even when experts say there’s going to be a pause while we digest the changes.’” (Stewart)

Technology has added to the different jobs available for being involved in these companies.  Financial intermediaries are one example. These people have a lot to do with what happens within the system.  “A number of benefits flowing from the economic system are produced by the ability of financial intermediaries to transmute the unacceptable claims on borrowers into acceptable claims on themselves. Firstly, through aggregating small amounts of funds for on-lending in larger parcels, liquidity is created for the lender. Secondly, through investing in a diverse portfolio of primary securities a financial intermediary can achieve a more efficient diversification of risk than an individual lender. Thirdly, by providing liquidity and reducing risk, financial intermediaries are able to tap savings that would otherwise not have been available. In the fourth place, by facilitating the availability of finance these institutions ease the constraint of income on expenditure, thereby enabling the consumer to spend in anticipation of income and the entrepreneur to acquire physical capital. Finally, through their expertise financial intermediaries help to ensure that the flow of funds is allocated in the most efficient manner. In the next section the functions performed by specific financial intermediaries will be discussed.” (Dougal)

Other jobs within the market are important to the financial market as well. A financial broker is a good example. Brokers get all the information, whether it is on the market conditions to government regulation. They make sure that the clients get what they want. They also do a great deal of planning for a client on what are the best buys and selling activity for them. They pretty much control the financial market and where it is headed in the future.

Although brokers are an important asset, in the near future they maybe come extinct. The internet has become a huge asset. NASDAQ uses mostly the internet to do its clients online investment. Looking at NASDAQ’s website is a good indicator of this. It is filled with constant activity. It shows in very much detail what is going on with the market at any given time. This has given the investor their own ability to do their investing without needing advice by a broker. So now brokers are mostly used for reassuring everything is legal and in regulation. But until all that information can be found easily on the web brokers will still have a job. But things are changing and they will have to evolve with these changes.

A scandal rocked the stock exchanged community and has changed it. “In September 2002, New York State Attorney General Eliot Spitzer sued five corporate executives (former WorldCom chief executive Bernard Ebbers, Qwest chairman Philip Anschutz, former Qwest CEO Joseph P. Nacchio, Metromedia Fiber chairman Stephen Garofalo and former McLeod CEO Clark McLeod) for repayment of funds garnered through profiteering in Initial Public Offerings (IPOs) and phony stock ratings given by Salomon Smith Barney (and specifically, analyst Jack Grubman) in return for investment banking business. Spitzer plans to finish his investigations by mid-December 2002 with a settlement that will include millions of dollars in fines and some restrictions, but not the major structural changes he once sought. In January 2003, Spitzer reached a “global” settlement with top Wall Street firms. They pledged to pay $1.4 billion to settle federal and state charges. [Update: In April 2003, the SEC settled enforcement actions against ten Wall Street firms and two individual analysts (Henry Blodgett ; Jack Grubman) arising from an investigation of research analyst conflicts of interest.” ( Bernard Ebbers was head of WorldCom. WorldCom had merged with one of the biggest technological companies MCI April, 2003. This was one of the biggest technological mergers. This merger had broken up monopolies such as AT;T that had dominated the telephone industry. But after the scandal WorldCom was changed. The company filed for bankruptcy. “For a time, WorldCom (WCOM) was the United States’ second largest long distance phone company (AT&T was the largest)” (Jeter)

In conclusion, Amex and NASDAQ each are extremely similar. Their big difference being technology. But even with the best technology the Telecom Scandal showed the one person can destroy a corporation.


Dougall, H.E., Capital Markets and Institutions, second edition, New Jersey: Prentice-Hall, 1970.
Jeter,Lynne. Disconnected: Deceit and Betrayal at WorldCom, Wiley., 2003

Stewart, Neil, NYSE, Nasdaq and Amex debate,, Oct, 2005

SEC Fact Sheet on Global Analyst Research Settlements, SEC Fact Sheet on Global Analyst Research Settlements – April 2003

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