stock exchange

stock exchange organized market for the trading of stocks and bonds (see bond ; stock ). Such markets were originally open to all, but at present only members of the owning association may buy and sell directly. Members, or stock brokers , buy and sell for themselves or for others, charging commissions for their services. A stock may be bought or sold only if it is listed on an exchange, and it may not be listed unless it meets certain requirements set by the exchange's board of governors. There are stock exchanges in all important financial centers of the world; the New York Stock Exchange (NYSE, in nearly continuous operation since 1792), which had a trading volume of $7.3 trillion in 1998, is the largest in the world. Tokyo, London, and Frankfurt also have major facilities, and Euronext, an inter-European exchange that merged with the NYSE in 2007 and combines facilities in Amsterdam, Brussels, Paris, and other cities, is also significant.

By providing a centralized, ready market for the exchange of securities, stock exchanges greatly facilitate the financing of business through flotation of stocks and bonds. However, speculation in stocks can sometimes accentuate the instability of an economy. The reality of the Great Depression was emphasized by the stock market crash in 1929. The interstate sale of securities and certain stock exchange practices in the United States are regulated by federal laws administered by the Securities and Exchange Commission . Today, a large percentage of stocks are traded through such over-the-counter organizations as Nasdaq (National Association of Securities Dealers Automatic Quotations) and its European equivalent, Nasdaq Europe (formerly Easdaq). Through these organizations, many securities not listed on a major stock exchange may be traded by dealers using computer and telecommunications technology; in 1994, Nasdaq, on which many computer and other high-technology stocks are traded, surpassed the NYSE in annual share volume. After the deregulation of the British securities market in 1986, the London Stock Exchange saw a decline in business due to a new computerized market similar to Nasdaq.

Computer-driven trade has significantly affected the stock exchange. Computer and telecommunications technology, besides opening a wide market in over the counter dealings, has also given rise to trading on an international level. Personal computers and modems allow trading to occur around the clock (after-hours NYSE and Nasdaq trading began in 1999), and the securities trading on one major stock exchange can now significantly affect the trading on others. Many contend that the traditional manner of trading will eventually become obsolete. Technology also now allows for "day trading," a high-risk business in which numerous computerized trades are made during a single day, with large gains (and large losses) possible. See also margin requirement .

Bibliography: See A. Crump, The Theory of Stock Speculation (1983); D. L. Thomas, The Plungers and the Peacocks: An Update of the Classic History of the Stock Market (1989); E. S. Bradley and R. J. Teweles, The Stock Market (7th ed. 1998).

stock exchange (stock market, securities exchange) Organized market for the buying and selling of stocks and shares issued by corporations. The stock exchange allows for the speculative purchase of stock in the hope that the price will increase, and thus yield a profit to the investor, or provide dividend payment giving a fair rate of return on the investment. Stockbrokers act as the agents in the purchase and selling of stocks and shares. There are exchanges in major cities throughout the world, with the largest in New York, Tokyo, and London.

stock exchange. The formal origins of the Dublin Stock Exchange date from 1799 when the Irish parliament passed a bill to regulate stock brokers. The original membership stood at thirteen; before that time informal dealings had been conducted by a small number of businessmen. The foundation of the stock exchange reflects the growth of Irish government debt at the close of the 18th century and the increased volume of canal debentures held in Dublin. In 1844 there were 47 joint‐stock companies listed in Ireland; however, in the 50 years following the introduction of limited liability in 1855 approximately 2,850 companies were registered under the Company Acts. Separate stock exchanges were established in Cork in 1886 and in Belfast in 1895. In 1971 the Cork Stock Exchange merged with all stockbrokers operating in the Irish Republic to constitute the Irish Stock Exchange. In 1973 Belfast became a unit within The Stock Exchange, a body embracing all UK stock exchanges. The Irish Stock Exchange also merged with The Stock Exchange in 1973, but became independent once again in 1996, a move which reflects the growing divergence of the British and Irish economies.

Mary Daly