The American Stock Exchange, most popularly known as the AMEX is the stock exchange located in New York. It was previously known as the New York Curb Exchange.
Evolution of the American Stock Exchange
The American Stock Exchange started in the form of an outdoor market from the colonial times. The stock brokers participated in the American Stock Exchange to trade in new government securities. As the volume of trade expanded it became very difficult to trade by shouting only and so the stock hand signals were introduced. Although the market moved inwards in 1921, the stock hand signals continued. The Building was named as the National Historic Landmark in 1978. In 1998 the American Stock Exchange joined with the National Association of Security Dealers to form the NASDAQ-AMEX Market Group.
Products Traded by American Stock Exchange
The American Stock Exchange has shifted its focus from stocks to options and Exchange traded funds. Nevertheless it does trade in small and medium sized stocks.
The ETFs ( Exchange Traded Funds) is a basket of securities that are used to record the performance of an index but it acts like a single stock. The Exchange Traded Funds provide the following advantages to the individual as well as the institutional investors and they are:
- Tax Efficiency
- Lower Costs
- Transparency
- Flexibility in Buying and selling
- Tracking and Trading all day long.
- Diversification
- Wide Array of investment strategies
Most of the Exchange Traded funds of US are traded in the American Stock Exchange. They are :
- SPDR: The full form of SPDR is Standard and Poor's Depository Receipts. This is linked to the S&P 500. they are often called “Spiders” which are the shares and stocks used to track the value of S & P 500. The SPDR is devised as the Unit Investment Trust.
- Powershares
The American Stock Exchange tried to implement the Canada income trust model. The Income Hybrid Securities that are listed in the American Stock Exchange are B&G Foods Holding Corporation, Centerpalte, Inc, Coinmach Service Corp and Otelco Inc.
Companies listed under the American Stock Exchange
The large companies that are listed under the American Stock Exchange are:
- British American Tobacco
- Imperial Oil Limited
- Seaboard Corporation
- Bio-Rad Laboratories
Stock Market Indices of American Stock Exchange
The American Stock Exchange has introduced stock market indices for the Internet companies known as the Interactive Week Internet Index. In the recent times the American Stock Exchange has introduced the Intellidexes which try to gain alpha by creating indices that are weighted on fundamental factors. The American Stock Exchange has also introduces the AMEX Composite , a value added index.