Reviewing Stock Exchanges
Most securities in Canada trade on the Toronto Stock Exchange (TSX), which
was established in 1852. The TSX is owned by the TMX Group, which also
operates the TSX Venture Exchange for small new companies as well as the
Montreal Exchange for derivatives trading. Fixed-income bonds, natural gas,
crude oil, and electricity contracts also trade through the TMX Group. TSX is
the eighth largest in the world by market capitalization.
A handful of electronic exchanges have taken some blue-chip stock trading
business from the TSX because of improved technology and lower fees.
Rivals include Alpha and Chi-X Canada, which operate as alternate trading
systems (ATS). Pure trading is another ATS that is connected to the Canadian
National Stock Exchange (CNSX), where shares of emerging companies are
traded.
The US stock market dates back to May 17, 1792, when 24 brokers signed an
agreement under a buttonwood tree at what today is 58 Wall Street. The 24
brokers specifically agreed to sell shares of companies among themselves,
charging a commission or fee to buy and sell shares for others who wanted to
invest in a company. Yup, the first American stockbrokers were born that day.
the brokers adopted a formal constitution and named their new entity the
New York Stock & Exchange Board. Brokers actually worked outdoors until
1860, when operations finally were moved inside. The first stock ticker was
introduced in 1867, but it wasn’t until 1869 that the NYSE started requiring
the registration of securities for companies that wanted to have their stock
traded on the exchange. Registration began as a means of preventing the
over-issuance (selling too many shares) of a company’s stock.
From these meagre beginnings, the NYSE built itself into the largest stock
exchange in the world with many of the largest companies listed on the
exchange. Trading occurs on the floor of the exchange, with specialists
and floor traders running the show. Today these specialists and floor traders
work electronically, which first became possible when the exchange
introduced electronic capabilities for trading in 2004. For traders, the new
electronic trading capabilities are a more popular tool than working with
specialists and floor traders. Electronic trading capabilities were enhanced
when the NYSE merged with Archipelago Holdings in 2006. The exchange
expanded its global trading capabilities after a merger with Euronext in 2007,
which made trading in European stocks much easier. Some European companies,
such as German insurer Allianz, have delisted from the NYSE due to the
American regulatory burden of Sarbanes-Oxley legislation. The federal law of
2002 seeks to promote corporate accountability.
You may not realize just how much the concept of supply and demand influences
the trading price of a stock. Price swings of a stock frequently are
caused by shifts in the supply of shares available for sale and the demand created
by the number of buyers wanting to purchase available shares.
Toronto Stock Exchange (TSX) and
other Canadian exchanges
other Canadian exchanges
Most securities in Canada trade on the Toronto Stock Exchange (TSX), which
was established in 1852. The TSX is owned by the TMX Group, which also
operates the TSX Venture Exchange for small new companies as well as the
Montreal Exchange for derivatives trading. Fixed-income bonds, natural gas,
crude oil, and electricity contracts also trade through the TMX Group. TSX is
the eighth largest in the world by market capitalization.
A handful of electronic exchanges have taken some blue-chip stock trading
business from the TSX because of improved technology and lower fees.
Rivals include Alpha and Chi-X Canada, which operate as alternate trading
systems (ATS). Pure trading is another ATS that is connected to the Canadian
National Stock Exchange (CNSX), where shares of emerging companies are
traded.
New York Stock Exchange (NYSE)
The US stock market dates back to May 17, 1792, when 24 brokers signed an
agreement under a buttonwood tree at what today is 58 Wall Street. The 24
brokers specifically agreed to sell shares of companies among themselves,
charging a commission or fee to buy and sell shares for others who wanted to
invest in a company. Yup, the first American stockbrokers were born that day.
the brokers adopted a formal constitution and named their new entity the
New York Stock & Exchange Board. Brokers actually worked outdoors until
1860, when operations finally were moved inside. The first stock ticker was
introduced in 1867, but it wasn’t until 1869 that the NYSE started requiring
the registration of securities for companies that wanted to have their stock
traded on the exchange. Registration began as a means of preventing the
over-issuance (selling too many shares) of a company’s stock.
From these meagre beginnings, the NYSE built itself into the largest stock
exchange in the world with many of the largest companies listed on the
exchange. Trading occurs on the floor of the exchange, with specialists
and floor traders running the show. Today these specialists and floor traders
work electronically, which first became possible when the exchange
introduced electronic capabilities for trading in 2004. For traders, the new
electronic trading capabilities are a more popular tool than working with
specialists and floor traders. Electronic trading capabilities were enhanced
when the NYSE merged with Archipelago Holdings in 2006. The exchange
expanded its global trading capabilities after a merger with Euronext in 2007,
which made trading in European stocks much easier. Some European companies,
such as German insurer Allianz, have delisted from the NYSE due to the
American regulatory burden of Sarbanes-Oxley legislation. The federal law of
2002 seeks to promote corporate accountability.
You may not realize just how much the concept of supply and demand influences
the trading price of a stock. Price swings of a stock frequently are
caused by shifts in the supply of shares available for sale and the demand created
by the number of buyers wanting to purchase available shares.
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