The New York Stock Exchange (NYSE) is located in New York City. It is one of the biggest stock exchanges in the world and lists over 3,200 companies. The NYSE allows buyers and sellers to trade stock efficiently among each other. Just as a supermarket allows business to be conducted between merchants and consumers, the NYSE allows stock to be sold between buyers and sellers.

Up until January 2007, stocks were bought and sold on the floor of the NYSE. Now, the Hybrid Market has allowed stocks to be easily bought and sold electronically. The NYSE is efficiently run and set up specifically. All stock brokers must know where to go when they are ready to trade stock.

All stock brokers on the floor must hold a seat on the exchange. There are 1,366 seats available that are bought and sold similar to stock on the exchange itself. They are very expensive but are required to be on the floor and trade.

Two of the most common U.S. stock indexes are the Dow Jones Industrial Average, or the Dow for Short, and the Standard & Poor 500, or S&P 500. The Dow includes 30 large companies, and the S&P 500 includes, you guessed it, 500.

Indexes are often used as a measuring point for how well the market is doing as a whole. The Dow is calculated through a price weighted average. Instead of a simple average, it is calculated by adding together the price of each of the 30 stocks and dividing it by 30 in order to keep it proportional.

The S&P 500 is often considered a better index to look at because it includes 500 stocks and is market value-weighted. They compute the value based upon the market value of the shares outstanding. An example would be if one stock has three times as many stock outstanding, it will be counted three times as much.

Financial experts use Market Value Indexes to rate the overall progress of the stock market. For example, they will compare the value of the S&P 500 last month to this month to see if it went up or down. The Dow is used as well the same way, as are other indexes.

If you want to succeed in the stock market, you must understand the exchanges you buy from and the indexes well. They will help you tremendously and have been proven to be effective.