A stock exchange does not own shares. Instead, it acts as a sort of high-tech market where buyers join with sellers. Every public stock trades on one of several possible exchanges such as the AMEX or NASDAQ. The primary function of an exchange is to liquidate their share holdings. AMEX is primarily an auction based, which means specialists are physically present on the exchanges' trading floors. AMEX is a smaller but quite prestigious exchange. AMEX also has a history of innovating: it pioneered the concept of exchange traded funds (ETFs) and it has the second largest options trading market.
The NASDAQ was the world's first electronic stock market. The NASDAQ is a computerized system that facilitates trading and provides price quotations on some 5000 of the more actively traded over the counter stocks. NASDAQ was founded in 1971 by the National Association of Security Dealers. The NASDAQ is owned and operated by the NASDAQ Stock Market, Inc.
NASDAQ is now the largest electronic screen based equity securities market in the United States. Trading in NASDAQ takes place directly between investors and their buyers or sellers, who are the market makers, through an elaborate system of companies electronically connected to one another.
The NASDAQ has roughly 3200 companies, it lists more companies and on average the NASDAQ trades more shares per day than any other US Market. It is home to companies that are leaders across all areas of business technology, retail, communications, financial services, digging, transportation, media and biotechnology. NASDAQ allows multiple market participants to trade through its Electronic Communications Networks structure, thus, increasing competition.
AMEX is an American stock exchange situated in New York. AMEX is the third-largest stock exchange by trading volume in the United States. The AMEX handles about 10% of all securities traded in the U.S.