A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.
To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but trade is increasingly less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is by members only.
The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets are driven by various factors that, as in all free markets, affect the price of stocks (see stock valuation).
There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global market for securities.
Other articles related to "stock exchange, exchanges, exchange, stock exchanges":
... In the 19th century, exchanges were opened to trade forward contracts on commodities ... Exchange traded forward contracts are called futures contracts ... These commodity exchanges later started offering future contracts on other products, such as interest rates and shares, as well as options contracts ...
... The Lahore Stock Exchange (Guarantee) Limited came into existence in October 1970, under the Securities and Exchange Ordinance of 1969 by the Government of Pakistan in response to the needs of ... The LSE was the first stock exchange in Pakistan to use the internet and currently 50% of its transactions are via the internet ... The Lahore Stock Exchange has opened branches in the industrial cities of Faisalabad and Sialkot for trading ...
... The Dar es Salaam Stock Exchange is a stock exchange located in Dar es Salaam, the largest city in Tanzania ... in April 1998 it is a member of the African Stock Exchanges Association ...
... The original Stock Exchange add-on was published by Capitol Novelty Co ... Shortly after Capitol Novelty introduced Stock Exchange, Parker Brothers bought it from them then marketed their own, slightly redesigned, version as an add-on specifically for their "new" Monopoly ... Free Parking square is covered over by a new Stock Exchange space and the add-on included three Chance and three Community Chest cards directing the player to "Advance to ...
... Lahore Stock Exchange (Guarantee) Limited (LSE) is Pakistan's second largest stock exchange after the Karachi Stock Exchange ...
Famous quotes containing the words exchange and/or stock:
“But come what sorrow can,
It cannot countervail the exchange of joy
That one short minute gives me in her sight.”
—William Shakespeare (15641616)
“Id rather I were dead and gone,
And my body laid in grave,
Ere a rusty stock o coal-black smith
My maidenhead should have.”
—Unknown. The Twa Magicians (l. 1720)