The NYSE is located on Wall Street in New York City. NASDAQ, however, is not located at any particular physical location -it operates through a computer network.
The average person has no direct access to the stock exchange. In order to trade on the exchange, he or she needs an intermediary, who is called a stock market broker. Most stock market brokers represent banks that provide a variety of services to their customers through securities clerks. These clerks receive buy and sell orders from their customers.
In addition to the banks there are also private brokers. The Stock Exchange authorizes these brokers to trade. Both banks and private brokers charge a fee for their services.
Over the Counter Trading (OTC)
There are a number of stocks that are not listed in any exchange. Despite that, they are traded directly between brokers. This type of trading between brokers is called, “over the counter.”Generally, small companies that cannot get listed on the exchanges are traded over the counter. Often, these companies issue a very limited number of shares.
Due to their low trading volume, over the counter stocks are known for having very volatile prices. Over the counter trading is conducted without any regulations, and is not assisted by specialists or market makers. The OTC Bulletin Board (OTCBB) is a special computer program that assists brokers that trade over the counter. On this system, brokers post what shares they own and at what price they are looking to sell. There are thousands of stocks that are displayed on the OTCBB. Today, OTCBB trading is done online.