How to Buy NYSE Stocks

By Duncan Ferris

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The NYSE is the biggest exchange on the planet by market cap and one of the United States' oldest financial institutions. Here's everything you need to know to get in on the action.

If you're a beginner to investing, you may be asking "How to Buy NYSE Stocks?" - When it comes to stock exchanges the NYSE, or New York Stock Exchange, is very much the king of the castle. It’s the planet’s largest equities-based exchange by quite a distance and, with its grand columns and trading floor slap bang in the centre of Wall Street, the NYSE is inarguably one of the iconic landmarks in the world of investing.

Read on to find out how to buy the stocks that are listed on this historic exchange.

What is the NYSE?

The NYSE is the big dog of stock exchanges, with around 2,800 companies being listed on the index. The overall market capitalization of the stocks on the exchange amounted to almost $27trn in June 2022, outstripping all other equity-based rivals.

The NYSE was formed all the way back on 17 May 1792, when 24 stockbrokers signed an agreement on securities trading at 68 Wall Street. This document is called the Buttonwood Agreement.

The intervening 230 years has seen the organisation undergo immense change from this far simpler endeavour, which saw a handful of brokers meeting in coffeehouses to do business. Perhaps most significant among these changes is the electrification of business. This took place in the mid-2000s, when NYSE began to allow traders to send in orders for immediate electronic execution.

This is among the key factors to have made trading NYSE stocks so accessible for retail investors.

It's also worth noting that a listing on the NYSE comes with a certain level of prestige. The exchange has some of the most stringent requirements for companies who are looking to list their stock.

These requirements include:

  • At least 400 shareholders.

  • At least 1.1 million shares outstanding.

  • Share price of $4.00 minimum.

  • Submission of financial records, company by-laws, and executive information.

As such, a listing on the NYSE is quite a boost to a company's legitimacy and reliability from the perspective of investors.

Who can Trade on the NYSE?

Like with most other exchanges, you will need an account with a broker in order to trade stocks on the NYSE. This might mean a full-service broker, a discount broker or an online trading platform.

There is no requirement for US citizenship or residency in order to invest in stocks on the NYSE and you might not even need to open a US-based brokerage account, depending on where you are trading.

NYSE Industries

Being so large in size, the NYSE also has an extremely broad scope when it comes to equities from different sectors.

That means there are companies from the healthcare, materials, real estate, consumer staples, consumer discretionary, utilities, energy, industrials, consumer services, financials, and technology sectors with their stocks listed on the index.

This contrasts with the NASDAQ, which is NYSE's closest competitor in terms of size. Though the NASDAQ features companies from a wide range of sectors, its leaning towards growth stocks means the index is relatively tech heavy.

How to Purchase NYSE Stocks

First things first, you’re going to need to select a broker or trading platform if you haven’t already done so. This will involve determining which services you require.

For some people, they are simply looking for cheap and easy access to buying stocks with their savings. This is where online trading platforms like Robinhood, TD Ameritrade and eToro stand out as the best options. 

However, if you are looking for a little more expertise and assistance, as well as the human touch, you might want to go through a full-service broker like Merrill Lynch or Charles Schwab. Prices here are higher, but customers are more looked after.

Now you’ve picked, you need to open an account. Once this is up and running it’s time to add some of the not-so secret ingredient: money. Deposit your desired amount into your account.

With money in your account there’s nothing more holding you back. Time to get investing! But there's no need to rush into the process. Seek advice if you've opened an account with a full service broker. Research the stocks you are interested in buying.

Most importantly, don't put in more money than you can afford to lose!

ETFs and Other Options

If you don’t fancy investing directly in stocks, there is always the option of ETFs or index funds. These are more diversified investments which will, in theory, offer your money a little more protection. 

Those looking for ETFs might be best served by NYSE Arca, which is the top US exchange for this kind of financial instrument. Another related option, for those looking to trade small cap stocks, is the NYSE American. This also carries a slew of ETF options.

NYSE Open Hours

The NYSE is open for its core trading session from 9:30AM until 4:00PM Eastern Time. However, the exchange is closed on US public holidays or, if they fall on weekends, the Friday beforehand.

Before the market commences each day there is a pre-opening session that begins at 3:30AM, while extended hours run beyond closing until 8:00PM. These extra hours allow for additional electronic trading of limited volume, giving investors a chance to capitalize on breaking news that might be happening outside of normal trading hours.

Who Runs the NYSE?

Of course, someone has to control everything behind the scenes. In the case of the NYSE, that’s Intercontinental Exchange, Inc, otherwise known as ICE. As well as running the NYSE, the company operates several clearing houses and a number of futures exchanges across Europe and North America.

Appropriately enough, the company is listed on the NYSE under the ticker ICE.

Other equities exchanges run under the NYSE umbrella by ICE include:

  • NYSE Arca

  • NYSE American

  • NYSE National

  • Chicago Stock Exchange (NYSE Chicago)

Read our guides on how to invest in OTC, CSE and TSX stocks.

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Topics:
Investing
Retail investing

Author: Duncan Ferris

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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