In: Root » Legal and finance » Stocks and mutual funds
A stock exchange is a place where several stocks and securities are traded using online or other mediums. Thousands of stocks change hands each day and their prices keep on varying because of variable demand and supply conditions.
There are about twenty stock markets functioning today. The most well known stock exchange is the New York Stock Exchange (NYSE.) The NYSE is known as the "Big Board" and brings in the highest volume dollar trades everyday. The NYSE reminds of figures of women and men flooding the floor selling and buying stocks by screaming over the floor to get a nice price.
The system is completely computerized now and many of the iconic figures of the stock exchange have been substituted by electronic computers. With this change, trading can be done quickly and more efficiently.
All public companies have stocks and their stock price is calculated by how well they perform. Every time there is a big drop in the stock market, it represents a tough condition of the economy. On the other hand, the economic system is said to be booming when the stock market goes up.
The very first stock markets actually started hundreds of years ago in medieval France, so this is not a new system. Back then banks bought and traded debts from agricultural communities in order to regulate and handle their securities. The idea of companies being listed on the market place was first begun by the Dutch in the early 1600s.
It wasn't until the 1700s that the idea of the stock market really began to take off. Once it did, markets began to open everywhere. The stock market was more localized in those days and this led to more stock markets.
It is only after the spread of globalization that the stock exchanges have actually dwindled in number.
Learn more about Stock Market and Stock Exchange.
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