The name of a stock exchange, or a place where trading happens, conjures up the image of a busy floor with brokers, investors, and dealers trying to buy and sell shares. But, a stock exchange may be a real physical space as we think about it or a virtual place through a network of telecommunication of online trading. Two of the very famous examples of these two kinds of stock exchanges are the New York Stock Exchange (NYSE), which is a physical stock exchange, and the NASDAQ, which is an online network. Most of the trading in the Americas and across the world happens in these two stock exchanges and are household names for stock traders. However, there are some fundamental differences between the two.

The NYSE has big corporations, such as Coca-Cola, Wal-Mart, and General Electric, listed; on the contrary, NASDAQ lists ?tech giants,? such as Microsoft, Cisco, and Oracle.

The place where actual trading happens differs for these two exchanges. For NASDAQ, trading is virtual or over the online network. Investors and stock traders deal and interact with each other virtually to buy and sell stocks over the Internet. Thus, a trading floor is non-existent for NASDAQ. On the other hand, NYSE houses the actual investors and brokers who are on the exchange floor and deal with each other in a physical space.

The NYSE is known as an ?auction market?; this is because investors bid for shares on the floor as in an auction and the share goes to the lowest bidder. NASDAQ is known as a ?dealer's market?; here, trading does not happen through auction but through a dealer who interacts with the buyers and sellers.

As seen from the examples, NASDAQ is the home for many high-tech companies. The maximum listing fee for the exchange is $150,000 and the maximum continual yearly listing fee is $60,000. Thus, the stocks listed here are more ?growth-oriented.? It is believed, that the stocks on the NYSE are less volatile and more stable. The maximum listing fee for the exchange is $250,000 and the maximum continual yearly listing fee is $50,000. Though it does not make much of a difference whether stocks of a particular company are listed in NYSE or NASDAQ, companies pay some consideration to the fees and listing requirements before taking a decision.

Stock traffic in the two exchanges also needs to be controlled. In NASDAQ, this work is done by a ?market maker.? This is a very important role in a virtual exchange, as in addition to ensuring good traffic, the market maker must also try to create market demand for the stocks selling in NASDAQ. In NYSE, this role is played by a ?specialist.? The specialist has to help only to maintain the stock transactions happening in this physical exchange and does not have to create demand for the stocks.

NASDAQ was as a publicly-traded exchange, while NYSE was private before March 2006. At the same time, NYSE went public too. At present, this is no longer a differentiation between the NYSE and NASDAQ as both are publicly-traded.