Curb Exchange: See American Stock Exchange

Curb Exchange, historically known as the American Stock Exchange (AMEX), refers to the earlier forms of stock trading conducted literally on the curbs outside the stock exchanges. This progressed into highly organized trading platforms and eventually was absorbed into modern stock exchanges.

The term “Curb Exchange” originates from the time when brokers and traders conducted business on the street curbs outside the established stock exchanges. This informal method of trading stocks and other financial securities was born out of necessity due to the limitations and exclusivity of the major stock exchanges, such as the New York Stock Exchange (NYSE).

Evolution and Formalization

The Birth of AMEX

The Curb Exchange evolved to become the New York Curb Market Agency in 1908, later known as the New York Curb Exchange. By 1953, it was rebranded as the American Stock Exchange (AMEX). This transition marked the official shift from an outdoor, curbside trading environment to a more structured and regulated indoor exchange.

Merger and Modernization

In 2008, AMEX was acquired by NYSE Euronext, and by 2012, it was fully integrated into NYSE MKT, a marketplace that facilitates trading in small to mid-sized companies. The legacy of the Curb Exchange remains a testament to the evolution of stock trading practices in the United States.

Key Features and Differentiators

The Curb Exchange was notable for its focus on securities that were not listed on the NYSE, often referred to as non-listed or over-the-counter (OTC) stocks. It provided a platform for companies that were typically smaller and less established but still sought public investment.

Types of Securities Traded

• Equities: Stocks of smaller companies.
• Bonds: Corporate and municipal bonds.
• Commodities: Various commodities, including precious metals.

Trading Mechanisms

Initially characterized by its informal and vibrant street-side bidding process, the Curb Exchange gradually adopted more standardized and regulated trading mechanisms, improving transparency and investor protection.

Importance and Legacy

The evolution of the Curb Exchange into AMEX is significant in the history of financial markets. It represented the democratization of stock trading, providing more opportunities for both companies and investors despite its humble beginnings on the street curbs.

Related Terms

• Over-the-Counter (OTC) Market: A decentralized market where participants trade securities directly between two parties without a central exchange or broker.
• New York Stock Exchange (NYSE): The largest stock exchange in the world by market capitalization.
• NASDAQ: A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks.

FAQs

What was the main difference between the Curb Exchange and the NYSE?

The primary difference was the types of companies listed. The NYSE listed larger, more established companies, whereas the Curb Exchange (later AMEX) catered to smaller enterprises and those unable to meet the stringent listing requirements of the NYSE.

Why was it called the Curb Exchange?

It was called the Curb Exchange because trading initially took place on the street curbs outside the main stock exchanges.

What happened to the Curb Exchange?

The Curb Exchange evolved into the American Stock Exchange and eventually merged with the NYSE, becoming part of NYSE Euronext.

References

• “The American Stock Exchange: An Overview.” Investopedia.
• “Historical Overview of the Curb Market.” Financial History Review.

Summary

The Curb Exchange, now known as the American Stock Exchange (AMEX), played a crucial role in broadening the reach of stock trading in the U.S. From its origins on the curbside to its incorporation into the NYSE, it contributed significantly to the financial landscape by offering trading opportunities to a broader range of companies and investors.