What Is A Stock Exchange And What Does It Do?Summary: The financial world is dominated by the role of the stock exchange in a national economy. National and global markets influence politics, social policy and the lives of millions - often directly. Therefore, this section seeks to explore the role of markets in our lives and of other factors in stock markets. A Stock Exchange is an organised market for buying and selling financial instruments known as securities, which usually includes stocks, bonds, options, and futures. For the average man on the street, just stocks and bonds will be of interest. Most of the options and futures trades carried out will be on behalf of big businesses or fund management groups, both trying to lower or offset risks. Most stock exchanges have a specific location where their trades are completed. For the stock of a company to be traded at these exchanges, it must be listed, and to be listed, the company must satisfy certain requirements. These are generally termed as 'Listing Rules'. However, not all stocks are bought and sold at a specific site. Such stocks are referred to as unlisted. Many of these stocks are traded 'OTC' or 'over-the-counter'. This, in effect means that the trade is carried out by computer or telephone. Most of the world’s industrialized nations have one or more stock exchanges. Among the larger international exchanges are those in London, Paris, Milan, Hong Kong, Toronto and Tokyo. These stock exchanges all have a central location for trading. The major OTC market in the USA is the Nasdaq Stock Market (previously the National Association of Securities Dealers Automated Quotation [NASDAQ] system). The European Association of Securities Dealers Automated Quotation system (EASDAQ) is the major OTC market for the European Union (EU). Would you like to learn more about trading? You would? Great! Then please click here for an excellent
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