Stock exchanges have evolved over the hundreds of years that they have existed, remembering, of course, that exchanges were not always formal marketplaces like we know them to be today. On the contrary, all of the original exchanges were bazaars or flea market type areas, where buyers and sellers met, and products physically changed hands. As time progressed, however, it was no longer necessary to carry one’s load to the exchange venue. Farmers, in particular, would go to the exchanges or areas operated by boards of trade or merchant associations, and sell their crops. The crops might not even have been ready yet for harvest, but others purchased with the knowledge that they would receive the goods in the future. Then, it was no longer even a requirement to be at the exchange. Someone else did all the work. And now, no-one needs to go anywhere. Everything is automated and can be done through the computer.
Moreover, due to technological advances and the desire to automate, the open outcry system, that has been the trading platform for so long, exists only in limited circumstances. Instead, the world’s stock exchanges employ all-electronic trading, side-by-side trading, or open outcry with after-hours electronic trading. Because of automation, it is much easier for the average person to participate in trading. There is much more liquidity in the marketplace because of the simple access to the market. Many of the restraints and confines of older techniques have been stripped away from the current business models. In addition, trading has become cheaper and more cost effective for exchange owners, brokerages, and the end customers. Plus, automation has produced higher efficiencies through speed of execution. Broker-dealers, as well as independent traders can react quicker to market trends. This advantage has been particularly useful for hedge fund managers, as the ideal situation is to reduce risk and increase stability.
Further, although the history behind futures and options is dated as well, original exchanges did not yet have speculators participate in the trades. Once outsiders saw that money could be made between the time the contract was issued and the goods delivered, then exchanges became a marketplace that included buyers, sellers and speculators. Today, the world’s stock exchanges cater to all aspects of trading.
Indeed, many of the original stock exchanges from the 1800s have gone out of business or have been absorbed by other exchanges. Since regionalism and locality are no longer key aspects of exchanges, it really doesn’t matter if the backend that runs the exchange is in the same city or even in the same country. In fact, being on another continent is no longer a hindrance. Consequently, stock exchanges around the world are being amalgamated in record numbers, leaving what appears to be close to a monopoly among players.
In an effort to keep you abreast of the happenings in the world’s stock exchanges, we have chosen many of the most important important exchanges, those that have historical significance for a variety of reasons. We have traced their roots back to the beginning, and conveyed the reasons why they were important. Finally, we discuss where they are today.
As we welcome you to StockExchangesAroundTheWorld.com, we trust that you will find the information on this site, both enlightening and useful.