From Wikipedia, the free encyclopedia.
A stock exchange is an organization of brokers and investment bankers which
has the purpose of providing the facilities for trade of company stocks and other financial
instruments. Usually there is a central location at least for recordkeeping, but
trade is less and less linked to such a physical place, as modern markets are
electronic networks, which gives them advantages of speed and cost of
transactions. Trade on an exchange is by members only; one is said to "have a
seat" on the exchange.
In Europe, stock exchanges are often called bourses.
The trading of
stock on stock exchanges is called the stock market. Offer and
demand in stockmarkets is driven by various factors that affect the value of
stocks (see stock valuation).
Companies have to meet the requirements of the exchange in order to have
their stocks and shares listed and traded there. To be listed on the NYSE (New York Stock
Exchange), for example, a company must have issued at least a million shares
of stock worth $16 million and must have more than $2.5 million net income (1998
requirements).
Derivatives, currency, and commodities--that is, agricultural products and
industrial raw materials--are handled by a number of specialised exchanges.
See also
