Defining the Stock Exchange

A stock exchange is a place where stocks, or shares of companies, are bought and sold by investors, speculators, and professional traders. Various forms of stock exchanges have been around during the centuries, with one of the first ones being created in London. The most famous stock exchange in the United States, and arguably the world, is the New York Stock Exchange, or NYSE.

The New York Stock Exchange was founded in 1792 in New York City under the Buttonwood Agreement. When most Americans think of Wall Street and the stock market, this is the place they think of. It is still located on Wall Street in the financial district of New York City. Other stock exchanges in the United States include the Nasdaq and the American Stock Exchange.

Due to the invent of the internet and the increasing flexibility it offers, a stock exchange can either be at a certain location, or just be located in the “digital world.” The NYSE is the type of stock exchange that exists at a real place. The Nasdaq marketplace is an example of a stock exchange that is located completely on computers. There is no one place where the Nasdaq is actually located. There is just a place that holds the servers and the machines need to run the exchange.

The different stocks on the NYSE are run by market specialists who monitor and assist in the trading of all the stocks on the exchange. Each stock at the NYSE has its own group of specialists who receive all orders from brokers around the world, even from orders submitted on the internet. They then execute these trades to ensure an orderly marketplace. However, it is not known how long this will last since exchanges ran on the floor are being replaced by computer exchanges very quickly.

The Nasdaq marketplace does not have any of these market specialists. Instead, all of its trades are executed my online computers. The Nasdaq emphasizes this as a way for everyone to get better numbers on their stock trades. Because it is a computer-ran exchange, the Nasdaq allows some traders called market makers to connect directly to the marketplace and almost play the role the market specialists play on the NYSE.

There are also many different stock exchanges around the globe. Even though most of these are only used by locals or professional stock traders, most people should know they exist. Some of these exchanges are the London Stock Exchange, the Toronto Stock Exchange, the Osaka Securities Exchange, and the Shenzhen Stock Exchange, among others. Even though they aren’t as well known or as big as the NYSE, they all have a place in the international markets.