And the Winner Is ... the OTC! OVER-THE-COUNTER VS. AMEX

By Guy Halverson, writer of The Christian Science Monitor | The Christian Science Monitor, April 19, 1989 | Go to article overview
Save to active project

And the Winner Is ... the OTC! OVER-THE-COUNTER VS. AMEX


Guy Halverson, writer of The Christian Science Monitor, The Christian Science Monitor


THE day-to-day stock market slugfest between the American Stock Exchange (AMEX) and its chief rival, the NASDAQ listings of the National Association of Securities Dealers, may well be basically over, say a number of experts who monitor Wall Street.

In terms of the total volume of shares traded, the number of companies listed by AMEX or carried on NASDAQ's over-the-counter listings, NASDAQ's advanced electronic-trading system, and the growing equal treatment of NASDAQ and AMEX-listed companies in many states, NASDAQ appears to be a clear winner in what had become an intense battle for market supremacy, according to experts such as Merton Miller, a professor of finance at the University of Chicago.

Not only that, says Dr. Miller, AMEX, which saw its net-earnings slip sharply last year, following the 1987 market crash, appears well on its way to being outclassed by aggressive regional stock exchanges, such as the Midwestern Stock Exchange, based in Chicago.

"They're a minor market," sniffs a NASDAQ official, referring to the American Stock Exchange. "We're now more comparable to the New York Stock Exchange."

"They've just got every company that doesn't qualify for listing on a stock exchange," retorts an AMEX booster, with a laugh. "When we think of our American Stock Exchange, we think of `big fishes in a little pond.' A company on the AMEX has great visibility, and isn't going to get lost like they might over at the New York Stock Exchange. And there are important requirements for listing on the American Stock Exchange."

Outwardly, of course, the two competitive stock listings couldn't be more different. The American Stock Exchange is primarily an auction exchange - a forum for bringing together buyers and sellers. And there is an actual physical setting where trading takes place, just as is the case with the giant New York Stock Exchange (NYSE). Moreover, AMEX has fairly stiff listing requirements for companies, including a pre-tax income of $750,000; 500,000 shares publicly traded; and stockholder equity of $4 million.

NASDAQ, by contrast, is an electronic trading system involving computer communication between dealers. There is no central trading floor as there is with the NYSE or AMEX. Indeed, the term NASDAQ means National Association of Securities Dealers Automated Quotations. Here, in the NASDAQ listing, is where one can find listings for stocks traded over the counter, not on any formal exchange. Financial requirements are modest to minimal for NASDAQ.

Still, NASDAQ's growth, particularly for that of its National Market System, has been remarkable in recent years. NASDAQ goes back to the early 1970s. AMEX has been around since 1842, under its predecessor organization, the New York Curb Exchange, and since 1953 under its current name.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

And the Winner Is ... the OTC! OVER-THE-COUNTER VS. AMEX
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?