1 minute read

Stock exchange



Stock exchange, auction for the sale and exchange of stock, which is a certificate of ownership in a corporation. Stock markets exist in all major industrial states; stock market proceedings are published in most large daily newspapers. The price of each stock is determined each hour of the trading day, according to the laws of supply and demand. Factors that influence stock prices include the state of the economy, the public confidence in the economy, the amount of profit a company has made or is predicted to make, the rate of a company's growth or decline, and the market for a particular product.



Stocks bought and sold most actively are usually listed on the New York Stock Exchange (NYSE) in New York City. This market, established in 1792, is the leading exchange in the United States. Housed in a large building on Wall Street, the NYSE trades more than 22,000 common and preferred stocks and has a membership of 1,567, most of whom represent brokerage houses. The exchange serves as a place where such brokers can buy and sell stock for their clients, who pay them a commission. Information on stock market transactions and prices are transmitted by computer to every brokerage office in the nation.

In addition to the NYSE there are 12 other exchanges in the United States. The second largest is the American Stock Exchange (AMEX), also in New York City. Other important exchanges include the Midwest Stock Exchange in Chicago and the Pacific Exchange in San Francisco and Los Angeles. The largest securities market in the world is the over-the-counter (OTC) market, which exists primarily as a communications network. It is subject to the rules and regulations of the National Association of Security Dealers, Inc., which has the power to expel dishonest companies or dealers, or corporations that are insolvent.

Additional topics

21st Century Webster's Family Encyclopedia21st Century Webster's Family Encyclopedia - Sterility to Swedish