NYSE and Nasdaq (NASDAQ: NDAQ) are the two largest stock exchanges in the world, with a cumulative market capitalization* of roughly $28.5 trillion and $11.1 trillion for stocks listed on them, respectively. After NYSE’s acquisition by the Intercontinental Exchange (NYSE: ICE) in 2013, both companies have intensified their tussle to gain market share across multiple service categories. Trefis compares the key operational parameters as well as revenue sources for NYSE vs. NASDAQ in an interactive dashboard, parts of which are highlighted below.
ICE operates its equity markets prominently through the New York Stock Exchange, which has five cash equity exchange venues and two options exchange venues in the U.S. On the other hand, Nasdaq operates multiple venues for cash equities and equity options in the U.S., besides operating a transaction-reporting facility for FINRA and a couple of venues in Nordic and Baltic regions. The analysis here only pertains to ICE and Nasdaq’s U.S. equity market operations.
Classification of Revenue Sources
Intercontinental Exchange and Nasdaq’s total revenues can be broadly classified into four categories:
Trading and Clearing Revenues: It represents electronic trading fees, private transaction surcharge, and other volume-related charges received by the exchange. Data Services & Market Technology Revenues: It represents charges for data distribution, connectivity, analytics services, and other technology solutions. (NASDAQ reports both these revenue streams separately) Listing Revenues: A listing fee is charged on an annual basis along with a fee related to other corporate actions such as stock splits and initial public offerings. Other Revenues: It includes interest income on margin deposits, facility usage fee, market maker service fee, public relations solutions, etc.
NYSE is the undisputed leader but, Nasdaq has comparable operational metrics
In 2018, NYSE and Nasdaq reported market capitalization* of $28.5 trillion and $11.1 trillion of the U.S. listed stocks, respectively. However, despite the vast difference in