The exchange is a market that provides an environment in which various exchanges related to securities, stocks, commodities, and different p...
Exchange platforms provide an effective and organized environment because they centralize the buying and selling of a specific type of assets or stocks in a digital and fast way instead of dealing directly with the stock exchange, which saves the investor the trouble of rapid changes in market prices.
Definition of the stock market
They are organized bodies distributed across the world and represent physical sites where dealers and traders meet to trade securities and conduct exchanges and businesses through the paired auction system, and the most famous of these exchanges are the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE). And the London Stock Exchange (LSE), and the Tokyo Stock Exchange (TSE) “It can also be an electronic platform where securities, shares, and even products are exchanged through the digital system without the need for a physical presence in the central trading floor.
"Nasdaq" was known as the first electronic stock exchange in the world that allows buying and selling shares Via an electronic platform instead of being physically present on the trading floor.
Most of the global stock exchanges depend on the way they work on their laws and requirements to list any dealer in their stock market. Of course, these requirements differ from one exchange to another 'for example, the New York Stock Exchange, which is the most famous in America, requires net profit reports, minimum capital, and minimum rights of shareholders and stock holders.
Trading by electronic exchange
With the fluctuating conditions that the world knows, especially in light of the spread of the COVID-19 pandemic, trading through the electronic exchange has spread greatly, which came as an effective solution to the global economic conditions paralyzed by the pandemic.
The electronic exchange has saved many people the trouble of actually moving to the headquarters of the stock exchange and being satisfied with conducting financial transactions from inside the house through multiple exchange platforms, and this, of course, led to an increase in traders in these platforms and the use of complex algorithms to complete the largest number of multiple transactions at the same time These exchanges are Nasdaq and Bitcoin exchanges.
Pros and cons of exchanges
- One of the prominent advantages is transparency and effectiveness in commercial transactions, as all commercial transactions are settled at the best price available in the market and keenness to give equal opportunities to all dealers without exception.
- One of the negatives is that transactions are often conducted across several different exchanges in time and place, which created a kind of fluctuation in algorithmic trading, created a kind of false and rapid liquidity as a result of trading outside the expected patterns, and this process was overlooked by market events.
