1. Common Stock Market I- Overview of Trading Location in the US II- Stock Exchange -New York Stock Exchange (NYSE) (First Market) III- Over the Counter Market (OTC) (second Market) IV- The Third Market V- The Fourth Market

2. Overview of Trading location in the US US Secondary Markets for Common stock:  Organized Exchange or Central Auction Specialist Systems: New York Stock Exchange Exchange (NYSE or Bill Board) & American Stock Exchange (AMEC, ASE or Curb)  Over the Counter or Multiple Market Maker System (OTC) : The National Association of Securities Dealer Automatic Quotation System ( Nasdaq)

3. Securities Act 1934 defines two categories of traded stocks: -Exchange Traded Stock or Listed Stocks - OTC Stock or Non-exchange trade or Nonlisted, including Nasdaq-listed OTC Stocks and Non-Nasdaq OTC Stocks.

4. 4 Types of Markets on which stocks are traded  First Market : trading on exchange of listed stock  Second Market: Trading on the OTC market of stocks not listed on an exchange. Third Market: trading in the OTC Market of listed Stock.  Fourth Market: trading between investors without broker.

5. Stock Exchange (first Market) - Formal organization, approved and regulated by the SEC. - Physical Location, trading/exchange floor - Listing Requirements - Member: Registered Trader, Independent brokers, Commission broker and Specialist.

6. NYSE-assigned Specialist: 4 major roles 4 major roles: - Dealers: maintain orderly market - Agents : execute order - Catalysts : bring buyers and sellers together. - Auctioneers: quote current bid-ask price reflecting supply and Demand

7. Over the Counter (OTC) ( Second Market) Nasdaq : - No Central Trading Floor - Electronic Communication Network - Electric Quotation System - Listing Requirements - 2 tiers: National Capital Market & Small Capitalization Market.

8. OTC Bulletin Board: owned and Operated by Nasdaq and regulated by National Association Securities Dealers (NASD) Pink Sheets: owned and operated by National Quotation Bureau. Both provide subscriber services for stocks not listed on the NYSE, AMEC or NASDAQ. Other OTC Markets

9. Third Market Stocks listed on an Exchange and also traded on the OTC. Grew in 1960s : as a mechanism for some investors to avoid NYSE fixed Minimum Commission Network of dealer/broker: aggregate quotation and information, provide interparticipant order, rooting tools, but leave order execution to market participants.

10. Fourth Market - : Direct Trading of Stock between two investors without involvement of broker. - Using Computer or Internet to link buyers and sellers. - 2 Alternative Trading System:  Electronic Communication  Crossing Network

11. Reference : Capital Markets, Institution and Instruments, third Edition, Frank J. Fabozzi, Franco Modigliani Professor: JASPER KIM Thank You ! Thyly Prak