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Stock Exchange Characteristics

A stock exchange is a facility where stock brokers can buy and sell shares of stock and other financial instruments. At a stock exchange, buyers and sellers establish a price for shares through a system of bids and asks. Orders can be market orders, which are executed at the best available price, or limit orders, which are only executed at a specified price or better. Stock exchanges provide benefits such as lower transaction costs, high liquidity, transparency, and facilitating trading. The top stock exchanges in the world by market capitalization are the New York Stock Exchange, NASDAQ, Tokyo Stock Exchange, Shanghai Stock Exchange, and Hong Kong Stock Exchange.

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1K views2 pages

Stock Exchange Characteristics

A stock exchange is a facility where stock brokers can buy and sell shares of stock and other financial instruments. At a stock exchange, buyers and sellers establish a price for shares through a system of bids and asks. Orders can be market orders, which are executed at the best available price, or limit orders, which are only executed at a specified price or better. Stock exchanges provide benefits such as lower transaction costs, high liquidity, transparency, and facilitating trading. The top stock exchanges in the world by market capitalization are the New York Stock Exchange, NASDAQ, Tokyo Stock Exchange, Shanghai Stock Exchange, and Hong Kong Stock Exchange.

Uploaded by

Maher Ali
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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STOCK EXCHANGE

A stock exchange, securities exchange or bourse, is a facility where stock brokers and traders
can buy and sell securities, such as shares of stock and bonds and other financial instruments.

STOCK EXCHANGE TERMS :

 Bid: The price a buyer is willing to pay to buy shares


 Ask or Offer: The price a seller demands to sell shares
 Market Order: An order to buy shares at the best (lowest) current ask or sell shares
at the best (highest) current bid
 Limit Order: An order to buy or sell share at a specified price
 Stop Order: An order to sell shares at a specified price in order to prevent losses
from exceeding a preset amount

CHARACTERISTICS THAT MAKE STOCK EXCHANGE GOOD

1. Transaction Cost:
Lower transaction costs (as a percent of the value of the trade) make for a more efficient
market.
2. Capitalization Rate:
Capitalization rate is one of the factor which make stock exchange best in world.
3. Liquidity:
The free and transparent trading that takes place in the stock market prices all stocks
according to demand and supply, bid and ask.
4. Short-Term & Long-Term Investment:
Long-Term and short-term investment affect stock exchange position. Long-term
investment is good of stock exchange of any country.
5. Transparency:
Efficiency, growth, freedom and variety are all possible because of transparency that
allows all participants to access the bid and ask prices.
6. Facilitate Trading:
An organized and regulated stock exchange facilitates the efficient trading of stock
7. Security:
The legitimate sale of stock on any exchange requires reliable and accurate information.
stock exchange creates a more secure environment for investors, which helps them to
determine the risks of investing.
8. Market Regulation:
A stock exchange works in close cooperation with government agencies and officials.
9. Political stability:
Political stability is one of the factor that make stock exchange stable and growing
continuously.
10. Economic growth:
Higher economic growth or better prospects for growth will help firms be more
profitable because there will be more demand for goods and services.
11. Interest rates:
Lower interest rates can make stock market more attractive.
TOP -10 STOCK EXCHANGE OF WORLD

Trading
Capitalization Listed
Sr.No Stock Exchange Volume
Rate (USD) Companies
(USD bn)
1 New York Stock Exchange 30 trillion 1452 2,800

2 NASDAQ 11 trillion 1262 3300

3 Tokyo Stock Exchange 5.6 trillion 481 2,300

4 Shanghai Stock Exchange 5.5 trillion 536 1,000

5 Hong Kong Stock Exchange 4.3 trillion 182 2,324

6 Euronext 4.65 trillion 174 1,300

7 London Stock Exchange Group 3.8 trillion 219 3,000

8 Shenzhen Stock Exchange 2.7 trillion 763 2,184

9 TORONTO STOCK EXCHANGE 2.2 trillion 97 2,207

10 Bombay Stock Exchange 2.2 trillion 210 5,749

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