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What Are Stock Exchange Markets?

Stock Exchange Markets are places where people physically and electronically can buy and sell stocks, bonds, and other types of securities. Stock exchange markets provide a place where it brings the buyers and sellers together to trade. Pricing also changes according to the supply and demand in the markets. These markets also ensure fair trading through regulations. Stock exchange markets help investors grow their wealth and manage risks associated with the investments. 


There are major stock exchange markets around the globe. Here we will introduce five major exchange markets in the world:


  1. New York Stock Exchange (NYSE)

This exchange market was founded May 17, 1792 with the Buttonwood Agreement in New York City. NYSE introduced bonds in 1909 and public companies in 2006. It merged with Euronext (A pan-European stock exchange. One of the largest exchange groups in Europe) in 2007 and then acquired AMEX (American Stock Exchange was a stock exchange and focused on small and mid-sized companies) in 2008. 


Products

NYSE provides a wide range of products, in other words, financial instruments. The following are a few examples:

  • Stocks: Shares in companies. 

  • Bonds: Debt sold by governments and companies.

  • Exchange-Traded Funds (ETFs): Funds which include other assets like stocks and bonds that are traded like stocks. 

  • Derivatives: Involve options and futures contracts. Options are contracts that give buyers the right but not obligation to trade something at a certain price on a certain date and futures are contracts to buy and sell an asset at a fixed price on a specific future date. 

  • Structured products: Pre-made bundles of investments.  


  1. London Stock Exchange (LSE)

The London Stock Exchange dates back to 1801 by a group of traders and brokers. In 1986 after the Big Bang (a set of major financial reforms in LSE) a major change happened when computers replaced papers, commissions were deregulated, and foreign firms were allowed to own members. 


Products

  • Stocks: Public company shares.

  • Bonds: Corporate and government debt.

  • Derivatives: Options and futures contractors.

  • ETFs and funds: Index and sector tracking.

  • Clearing services: Settlement systems. 


These are the most common types of products found in most of the stock exchange markets. 


  1. Tokyo Stock Exchange (TSE)

Tokyo Stock Exchange founded May 15, 1878. It merged into a national exchange in 1943. TSE switched to electronic trading by 1999. 


Products

  • Stocks: Japanese company shares.

  • Equity index derivatives: Nikkei futures and options contracts. 

  • Other assets: Bonds, ETFs, REITs. 

These are not the only products but a few of them. 


  1. Shanghai Stock Exchange (SSE)

The first stock trading was in the 1860s and SSE closed in 1949. It was re-established on November 26, 1990. SSE launched STAR Market for tech firms in 2019. 


Products

  • Stocks: Shares in companies.

  • Bonds: Debt sold by governments and companies. 

  • Green Products: Financial instruments that are used to fund environmentally friendly projects. 

  • REITs: Companies and funds that own real states which produce income.

  • Derivatives: Options and Futures.



By M. Nargis

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