American Stock Exchange, Inc.

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American Stock Exchange, Inc.

also known as: amex founded: 1911 as the american curb market association

Contact Information:

headquarters: 86 trinity pl.
new york, ny 10006-1881 phone: (212)306-1000 fax: (212)306-1644 url:


The American Stock Exchange is one of three leading U.S. markets in securities, or financial assets, of which stocks are its principal article of trade. Stocks are a form of security whereby individuals can purchase partial ownership and voting power in a publicly owned corporation, and a stock exchange is an environment in which traders buy and sell stocks on behalf of their clients.

The American Stock Exchange, or AMEX, as it is called, has forged its identity in contrast to its two larger rivals, the older and more established New York Stock Exchange (NYSE) and the more dynamic NASDAQ (National Securities Dealers Automated Quotations). It trades a much smaller volume than either. Generally, the AMEX is home to smaller, more entrepreneurial companies than the NYSE, which lists such giants as IBM and McDonnell Douglas. This is because the AMEX has less strict requirements than its older Wall Street neighbor, whose conditions for listing a company include $2.5 million in annual before-tax earnings. Like the NYSE, however, the AMEX is an auction exchange, a traditional stock environment with traders on the floor buying and selling shares in public companies. This is in contrast with the NASDAQ, where trading takes place electronically.

Companies listing on the AMEX include Viacom, IVAX, Forest Laboratories, and Hasbro. When companies list on the AMEX, they choose a "specialist unit" of three or more stock specialists to perform their trading on the floor. The American Stock Exchange is governed by a 25-member board, including 12 representatives from the securities industry, 12 from the public, and a chairman.

In April 1998 the boards of the AMEX and the National Association of Securities Dealers (NASD), the parent of the NASDAQ, announced they had reached a definitive agreement on a plan to merge the AMEX into NASD's family of companies. Under the agreement, the AMEX will continue to operate as a separate specialist-based auction market with its own members and listed companies.


At the end of 1997, AMEX listed 783 companies with a market value of $168 billion dollars. This represented the exchange's highest number of new listings this decade, up 30 percent over 1996 listings, as well as record trading volume in equities and options. On February 12, 1998, a regular membership seat sold for $460,000, the highest price ever for an AMEX seat.


When Investment Dealers Digest referred to AMEX as "a bit of a poor relation among exchanges," it was echoing a familiar sentiment among observers such as Barron's, which had called it "an investment backwater" in a 1995 article. Investment industry observers, initially optimistic about the possibility that AMEX might present a substantial challenge to the NASDAQ, became more skeptical when the company failed to make substantial gains against its rival. Nonetheless, there continued to be hope for the growth of AMEX under the guidance of CEO Richard Syron.

AMEX has attracted interest from the computer industry because it is seen as the more high-tech of the two New York floor exchanges, both in its listings and in its in-house technology. Wall Street & Technology magazine in December 1995 praised the AMEX web site for its "winning Web alchemy" because the site promised to bring in new business to AMEX while educating visitors on the stock market.

With the proposed merger of AMEX with NASDAQ, there is much speculation as to how it will effect the industry. Some foresee higher costs and tightened liquidity, while others feel that the merger will make it easier and cheaper for those who trade in smaller stocks.


In the 1700s brokers began gathering in the area of the New York City docks to trade stock. This informal trading arrangement continued throughout the nineteenth century, gaining the nickname "Curb Market" because traders conducted their business quite literally on the curb. In 1911 this name was formalized with the formation of the New York Curb Market Association. The Curb Market finally moved indoors with the construction of the American Stock Exchange Building on Trinity Place, which commenced in 1920.

The exchange weathered the 1929 Crash and the ensuing Depression and in 1953 took its present name. Along with the NYSE, it began to make use of computers, and the two companies jointly formed the Securities Industry Automation Corporation (SIAC) in 1972. In the 1980s, AMEX experienced growth along with the rest of the stock market, and in 1987—the year of another October "crash," this one with much less severe impact—the exchange expanded its facilities. However, it continued to lag behind the NYSE and NASDAQ in volume of trade. In 1994 its board named former Boston Federal Reserve Bank President Richard Syron as its chairman and chief executive officer. During the same year, the AMEX board inaugurated a new advertising campaign to increase its business.

FAST FACTS: About American Stock Exchange, Inc.

Ownership: The American Stock Exchange is a not-for-profit auction exchange for the trading of stock in its nearly 800 listed companies.

Officers: Richard F. Syron, Chmn. & CEO; Anthony J. Boglioli, VChmn.; Max C. Chapman Jr., VChmn.; Thomas F. Ryan Jr., Pres. & COO

Employees: 670

Chief Competitors: Trading in stocks and other financial assets, the American Stock Exchange (AMEX) competes with: New York Stock Exchange (NYSE) and National Securities Dealers Automated Quotations (NASDAQ).

During 1995 the AMEX was making its presence known on the World Wide Web. Visitors to the exchange's Internet site could learn about AMEX and its listings, while listed companies could retrieve stock information. Despite some gains in 1997, the AMEX board agreed to merge with the National Association of Securities Dealers (NASD), NASDAQ's parent company, becoming an independent subsidiary of NASD and continuing as a specialist-based auction market and maintaining its members and listings. AMEX Chairman Richard Syron believes that "this combination builds on our organizational strengths—the Amex's auction market, service orientation, and new jointly developed technology platforms and the NASD's state-of-the-art quote-driven market and strong financial resources. It optimizes value for all concerned—investors, member firms, and listed companies."


In seeking to differentiate itself from its two rivals, the AMEX has sought to portray itself as more modern and high-tech than the NYSE and as a more profitable trading market than the NASDAQ. Hence it has emphasized the use of computers, becoming in 1995 the first U.S. stock exchange to create an Internet site, something the more staid NYSE has not yet done. In portraying itself as a more lucrative market than the NASDAQ, the American Stock Exchange released an advertisement in late 1994 touting 301 companies that had switched from NASDAQ to AMEX in the seven years following the 1987 crash. On both fronts, AMEX sought to portray itself, in the words of the slogan governing its massive advertising campaign launched in the early 1990s, as "The Smarter Place to Be."

Also vital to the AMEX image is that of an exchange friendly to mid-range or small entrepreneurial companies, as opposed to the extremely large and highly organized businesses who list on the NYSE. In particular, Arthur Levitt, Jr., exchange chairman in the 1970s and chairman of the Securities and Exchange Commission (SEC) as of 1997, emphasized AMEX interest in individual investors and small, dynamic companies.

In an attempt to make it easier for quote vendors to get the information out to the customer, AMEX delisted 250 index options series. This first of many steps should help cut down on the overwhelming number of quotes with which vendors must deal.

To bring AMEX to the forefront, a 1998 partnership was formed with Reuters America Inc. to broadcast daily from the AMEX television studios. First Business, a live 30-minute show, was scheduled to carry 75-second financial reports. Larry Kofsky, Wall Street Business correspondent, will cover the day's stories. Live video of the exchange, as well as market reports, have been available on AMEX's web site since mid-1997.

In a move to attract new listings, the Institutional Client Group (ICG) was formed in 1997. ICG's job is to work with those in investment banking in order to aggressively woo new companies. Though AMEX listings have seen a good rise since 1995, loss of former listings have kept the overall increase minimal.


Like all segments of the investment community, the AMEX has been influenced by stock market crashes, most notably the 1929 crash. But whereas the influence of stock market fluctuations comes and goes, the influence of its rivalries continued into the late 1990s.

CHRONOLOGY: Key Dates for American Stock Exchange, Inc.


Founded as the American Curb Market Association


Moves indoors to the American Stock Exchange building on Trinity Place


Expands its space to accommodate more trading


Becomes the American Stock Exchange (AMEX)


Appoints Mary Roebling governor


Forms the Securities Industry Automation Corporation (SAIC) with NYSE


Women begin trading on the AMEX floor


Is linked electronically with the Toronto Stock Exchange


Opens a European office


Expands its facilities


Richard Syron becomes Chairman & CEO


Begins listing stock information on the World Wide Web


Forms the Institutional Client Group


Announces agreement to merge AMEX into National Association of Securities Dealers' (NASD) family of companies

In the early 1990s, the American Stock Exchange directed most of its advertising efforts against NASDAQ rather than the NYSE. This was not only because NASDAQ, like AMEX, traded in emerging companies and presented less stringent listing requirements but also because the number two competitor was rapidly nearing first place. AMEX seemed to have been presented with a golden opportunity in 1995 when NASDAQ found itself caught up in a trading scandal and a Justice Department investigation. Most observers believed that AMEX would come out the winner, and, indeed, it seemed poised to do so.

Though Investment Dealers Digest reported in March 1995 that AMEX had spent only $679,000 on advertising in the first 11 months of 1994, as compared with $32 million for NASDAQ, AMEX appeared to have spent its dollars effectively. In one of its more successful advertisements, a full page in the Wall Street Journal, AMEX detailed the 301 companies that had switched from NASDAQ to AMEX in the seven years since the October 1987 crash. This resulted in enormous investor interest, particularly in one company featured in the ad, Organogenesis, which had been attempting to develop a skin substitute to assist in the healing of wounds.

But, as Barron's reported in February 1995, Organo-genesis stock failed to perform, and a closer examination of the list of the other 300 companies showed that AMEX had in fact lost 113 of them for a variety of reasons, none of which looked good for AMEX. (Some had switched back to NASDAQ or to the NYSE, while others had been delisted because they had fallen into bankruptcy or other types of financial difficulty.)

The failure of AMEX's Emerging Company Marketplace, a venture launched in 1992 and cancelled in May 1995 by the board of directors, was a further blow to the company's confidence. But the April 1994 ascendancy of Chairman Richard Syron, who helped to smooth over difficulties between executives and traders on the floor, gave observers new hope for the future of AMEX as it continued to pursue its tradition of innovation in the market.


The American Stock Exchange has tended to present itself as more forward-looking than its NYSE competitor, and as part of this it has been a leader in its use of computer technology in the marketplace. In the 1980s, it became the first stock market to introduce "touch-screen" technology for order placement on the floor. In 1996, traders on the AMEX floor began using wireless hand-held computers linked through a local area network (LAN), which made it possible for them to place orders without using the traditional hand signals that were once a colorful element of stock market trading.

Thus, it was not surprising when in 1995 the AMEX became the first U.S. exchange with a site on the Internet, which according to the company's annual report was getting 30,000 "hits" a day within a year of its establishment. The web site offers users access to general information on stocks and investments, as well as specific data on AMEX-listed companies and on the exchange itself.


The American Stock Exchange has typically traded in stocks or options, which represent the option to buy a given number of shares in a certain company over a specified time period. In 1995, several industry publications reported that AMEX would eventually move into trading futures, which involve speculation on the value of a commodity or stock at a set date in the future. Also in that year's annual report, AMEX announced a number of new derivatives, which are customized contracts whose value is derived or based on such indices as interest rates, currency exchanges, or the stock market itself. New products introduced by the AMEX Derivative Securities Division included listing on the Inter@ctive Week Internet Index, an index of 37 Internet-related companies whose name refers to Inter@ctive Week magazine.

To better serve its investors, AMEX unveiled a number of products in 1997. The AMEX Institutional Management (AIM) report helps their companies manage their institutional shareholder base. According to John Lafferty, president of JM Lafferty Associates Inc., "with the AIM Report, AMEX is helping companies see in precise, quantitative, and comparable terms how their stock fits with the portfolios of institutional investors. Once a company understands how it is positioned by investors, why some institutional investors hold its shares while others don't, it can articulate its aspirations in terms of the market."

Another service is the use of DIAMONDS, which trade like common stock shares. Used for the stocks in the Dow Jones Industrial Average (DJIA), DIAMONDS, according to CEO Richard Syron, will allow investors to "own a slice of the Dow Jones Industrial Average—representing the bluest of all the blue chip stocks—with a single security that is simple to trade and inexpensive to own." A DIAMONDS web site is accessible via AMEX's home page, providing FAQs, performance charts, price quotes, and other information.

Harnessing the power of the Web, AMEX also held its first online industry conference, ConferenceNet. The service facilitates fund managers' conferences on specific industries such as real estate, health care, or energy right from their desks. Video and audio presentations, graphics, and question-and-answer periods will provide investors with industry-specific information.



american stock exchange annual report. new york: american stock exchange, 1997.

"amex boosts new listings effort." american stock exchange press release, 12 june 1997.

"amex equity options trading hits record volume in april." american stock exchange press release, 4 may 1998.

"amex launches first stock market investment based on the dow jones industrial average." american stock exchange press release, 20 january 1998.

"amex seat sale record at highest level in exchange's history." american stock exchange press release, 12 february 1998.

"amex takes action to stem flood of options quotes." investment dealers' digest, 1 september 1997.

barney, lee. "winning webs." wall street & technology, december 1995.

"first live on-line video of wall street featured on new amex web site." american stock exchange press release, 9 september 1997.

greco, matthew. "amex introduces conferencenet." investor relations business, 15 december 1997.

lohse, deborah. "amex's board approves merger pact, with nasd board expected to follow." wall street journal eastern edition, 9 april 1998.

——. "nuptials may boost small caps' status." wall street journal, eastern edition, 16 march 1998.

longo, tracey. "too big for its britches?: as the nasd prepares to swallow amex, what will be the aftertaste for planners?" financial planning, 1 may 1998.

lux, hal. "can this exchange be saved?" investment dealers digest, 11 december 1995.

mack, gracian. "defining the playing field." black enterprise, june 1995.

maxey, daisy. "merger would have an impact on funds." wall street journal, eastern edition, 16 march 1998.

"nasd, amex boards approve definitive merger agreement." american stock exchange press release, 9 april 1998.

"reuters and amex team up for tv!" american stock exchange press release, 6 january 1998.

scipio, philip. "exchanges share holder information: iros are the target of this latest marketing blitz by nasdaq, amex." investor relations business, 2 june 1997.

"trading places." the economist, 25 march 1995.

"trading records, surge in new stock listings, and promising new products mark 1997 as milestone year for american stock exchange." american stock exchange press release, 22 december 1997.

wyatt, edward a. "here today . . . ." barron's, 27 february 1995.

For an annual report:

on the internet at:

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. the american stock exchange's primary sic is:

6231 security & commodity exchanges

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American Stock Exchange, Inc.

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American Stock Exchange, Inc.