Trading in the Stock Market – Background

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Trading in the Stock Market – Background

Trading in the Stock Market – Background

The trading of securities in the United States began in Philadelphia in 1790. The New York Stock Exchange (NYSE), which was the first organized stock exchange in the US, was founded in 1817. The American capital market is the largest in the world. The three main stock exchanges in the US are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the National Association of Securities Dealers Automated Quotations system (NASDAQ).

The behavior of the capital market is cyclical. Stock prices never move in a straight line; in fact, they constantly fluctuate. US capital has seen periods of both boom and depression during the 20th century.

The first major stock exchange crash occurred on October 29, 1929, when the Dow Jones Industrial Average (DJIA), which is an index composed of the 30 largest companies in the US, fell 12.8%. A second major crash occurred on October 19, 1987, when the DJIA fell 22.6%.

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