N: 1. Made up by two words: stock (the original Stock Market was a fish and meat market in the City of London near Mansion House; It was so called probably because it was located in the same site of a former stocks -which were large wooden blocks for punishment used in the early 14th century) and exchange (to exchange is the act “of giving one thing and receiving another in return”; It stems from Anglo-French eschaunge, Old French eschange -Modern French échange-, from Late Latin excambium, from excambiare, and ultimately from Latin ex “out”+ cambire “barter”).
2. There is no consensus on the place where corporate stocks were first traded. Some see the key event in the founding of the Dutch East India Company, while others claim that a share market existed as far back as ancient Rome. In any case, Amsterdam Stock Exchange was established in 1602 by the Dutch East India Company.
However, the Frankfurt Stock Exchange (in German, Frankfurter Wertpapierbörse), established in 1585,seems to be the oldest stock exchange in Europe. As for the London Royal Exchange, it was inaugurated by Elizabeth I in 1571. The New York Stock Exchange was set up in 1792.
3. Organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the forces of demand and supply. Stock exchanges basically serve as primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channeling savings of the investors into productive ventures; and secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system. Stock exchanges impose stringent rules, listing requirements, and statutory requirements that are binding on all listed and trading parties.
4. Trades in the older exchanges are conducted on the floor (called the ‘trading floor’) of the exchange itself, by shouting orders and instructions (called open outcry system). On modern exchanges, trades are conducted over telephone or online. Almost all exchanges are ‘auction exchanges’ where buyers enter competitive bids and sellers enter competitive orders through a trading day. Some European exchanges, however, use ‘periodic auction’ method in which round-robin calls are made once a trading day. The first stock exchange was opened in Amsterdam in 1602; the three largest exchanges in the world are (in the descending order) New York Stock Exchange (NYSE), London Stock Exchange (LSE), and the Tokyo Stock Exchange (TSE). Called also stock market. See also exchange.
5. The stock exchange shoulders the responsibility of ensuring price transparency, liquidity, price discovery and fair dealings in such trading activities. As almost all major stock markets across the globe now operate electronically, the exchange maintains trading systems that efficiently manage the buy and sell orders from various market participants. They perform the price matching function to facilitate trade execution at a price fair to both buyers and sellers.
6. A listed company may also offer new, additional shares through other offerings at a later stage, like through rights issue or through follow-on offers. They may even buyback or delist their shares. The stock exchange facilitates such transactions.
7. The stock exchange often creates and maintains various market-level and sector-specific indicators, like the S&P 500 index or Nasdaq 100 index, which provide a measure to track the movement of the overall market.
- Verb + stock exchange: open; close.
- stock exchange + verb: rally, rise, fall.
- stock exchange + noun: collapse, crash.
- Preposition: on the stock exchange.
S: 1 & 2. FinTr – https://bit.ly/2Kt9tgK (last access: 3 August 2019). 3 & 4. BD – https://bit.ly/2AACjr7 (last access: 3 August 2019). 5 to 7. Investop – https://bit.ly/2ALCPEe (last access: 3 August 2019). 7. OD – https://bit.ly/2YFJwzl (last access: 3 August 2019).
SYN: stock market, securities exchange.