For investors, a critical step is to understand the range of financial tools, or securities, that are available to investors.
Securities is a general term that refers to all types of stocks, bonds and money market instruments.
And, no matter which securities you choose to invest in, you also need to understand the regulated market system in which the purchase and sale of these financial instruments occurs. While trading for NYSE and AMEX stocks takes place on the floor of the physical exchange, Nasdaq stocks are listed and traded electronically. The NYSE, AMEX and Nasdaq Stock Market are all based in New York City. To be traded on any of these three exchanges, companies must meet the size and earning requirements of that market. Traditionally, a company is traded on only one of the three major markets, although it may also be traded on regional exchanges.