The stock market - market of stocks, bonds and securities – also securities market, is an integral part of the capital market. The stock market is about the market in which are traded securities which are either admitted for trading on any stock exchange, or those that are traded on the OTC market (Over The Counter).
Stock market is an abstract concept, designed to determine the set of actions and mechanisms that provide opportunities for trading in stocks, bonds, derivatives and other financial securities. Do not confuse the concept of the financial market with the concept of stock exchange as an organization that provides a place for trading deals, and where buyers and sellers of securities come together.
Here are the most popular stock exchanges:
NYSE - The New York Stock Exchange is the largest in the world and a major stock exchange in the United States. It serves as a symbol of USA financial power and the whole financial industry. Here you can define the Dow Jones (the world-renowned index for shares of industrial companies), and one of the most popular in the world index - NYSE Composite. The last one reflects changes in exchange of any shares that are listed on the New York Stock Exchange. This number includes more than 1500 shares of the largest US companies, the total capitalization being more than $ 20 billion. Based on the NYSE Composite index, it is extremely convenient to recognize and measure how the US economy feels.
New York Stock Exchange was founded in May 17, 1972. Three years later, in 1975, it was declared a non-profit corporation owned by 1336 individual members. The number of owners of New York Stock Exchange is consistent since 1953. If desired, individual members of the Exchange may sell their place. The buyers should pay for a place up to 3 million dollars.
In March 2006, NYSE merged with electronic exchange – Archipelago Holdings, after which, for the first time in its history, NYSE offered shares to investors and become a commercial organization. NYSE Group shares are traded on the very same NYSE.
In trading operations on the stock exchange there are involved securities of more than a thousand names. By the end of this year, the total capitalization of the companies, which trade on the NYSE, is $ 19.2 trillion.
NASDAQ – abbreviation for National Association of Securities Dealers Automated Quotation – is an US OTC market. The specialty of the market is about shares of high-tech companies engaged in the manufacture of electronics and software. NASDAQ is one of the three major US exchanges (including AMEX and NYSE); it is a division of NASD controlled by SEC. The owner of the stock exchange is NASDAQ OMX Group, which also owns 8 European stock exchanges.
Today, in NASDAQ commercial transactions are involving shares of over 3200 companies.
From 9:30 am to 16:00 pm (East Coast time) on the Nasdaq there is held the regular trading session. Transactions are made on the SuperMontage and Primex trading platforms. If the regular trading session comes to an end, there is possibility for trading through the platform SelectNet until 20:00 in the post-trading session.
Trades on the NASDAQ have a different scheme compared to other traditional exchanges. In this exchange we have the competition of several market makers for the execution of orders per customer, the number of which exceeds 600. Exchange market maker in NASDAQ (analogous to the NYSE), fulfilling its main function, establish quotes continuously and maintains the liquidity of a particular group of shares, while continuing trading. Different market-makers support different numbers of shares - from some hundred to several thousand. It turns out that the liquidity of one type of shares can be supported by fourteen market makers, and others - by 50. Quotes of NASDAQ system are formed by comparing quotes of market makers with alternative trading systems.
NYMEX – New York Mercantile Exchange (NYSE: NMX), is the leading in oil futures trade and was established in 1872. On this exchange there are traded contracts for oil and gas, and also precious metals (platinum, gold, silver, palladium, copper and aluminum). According to data provided by the Futures Industry Association, for a year, on this exchange were made 216 million transactions.
LSE – London Stock Exchange is one of the oldest and largest stock exchanges in the Old World. According to official data, the exchange was founded in 1801, although its actual operations started in 1570, since the construction of «Royal Exchange» by the royal financial agent and adviser Thomas Gresham on his personal funds.
LSE is a joint stock company the shares of which are traded on its own platform. It has around 3000 companies from over 70 countries admitted to trading on its markets and its capitalization is $ 6 billion.
TSE - Tokyo Stock Exchange was founded in 1878. Tokyo Stock Exchange acts as a non-profit membership organization that is a legal entity. This exchange has broad self-governance rights.
Over 80% of Japan's stock market turnover falls on the Tokyo Stock Exchange. The main buyers and sellers are the institutional owners of securities. According to Japan laws, individual owners can hold only 20% of the shares traded on the stock exchange. 80% are held by financial institutions, companies and corporations. The holders of shares do not bet on dividends (which in 1990 accounted for only 70 % of the market value of the shares), but on the fact that the share price will rise and will be able to sell at a higher rate, that will bring tangible returns. It should be noted that averagely early income for the sold share, released from 1980 to 1994, was 34.7%. On the Tokyo Stock Exchange there are carried out the sale and purchase of more than 80% of the shares traded in the country. On the TSE, there are registered 1517 companies from 1.3-1.5 million companies which operate in the country, but they account for over 25% of all manufactured goods and services in Japan.
It is the fourth on the world ranking of the largest markets in the world with a capitalization of $ 4.4 billion
VSE – The Vienna Stock Exchange (Wiener Borse AG, WBAG) is the only trading platform in Austria and one of the oldest stock exchanges in the world. On VSE there are traded derivatives, bonds and shares. The exchange was founded in 1771 by Empress Maria Theresa. Today, it is a private company. Its trading volume consists $ 48 468 million. There are listed 110 companies and its capitalization is $ 157 358 million.
FBW – The Frankfurt Stock Exchange, also Deutsche Borse, is the largest stock exchange in Germany and is one of the largest exchanges in the world. The platform operator is Deutsche Boerse Group AG. The start of operation of the stock exchange is said to be the adoption by Frankfurt merchants in 1585, of single rates for currency exchange. By that time the city was already one of Europe's largest trading centers. From 1949, the exchange takes a leading position in Germany. Since 1993, the exchange came under the control of «Deutsche Boerse Group», created on its basis.
The main index of it is the DAX (Deutscher Aktienindex), which reflects the stock prices of 30 largest companies in Germany. The index serves as a barometer of the economy.
These are the most popular stock exchanges that have tradition and attract the interest of investors all over the world. There are also huge names like Shanghai Stock Exchange, Hong Kong Stock Exchange, Euronext, or TMX Group from Canada, but the ones described in the text were selected because of a more specific history. Go online for more info about other exchanges!