Stock Exchange Research Paper

Stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. A stock exchange can be physical or virtual. In physical an exchange transactions are carried out on a trading floor. On a trading floor there are hundreds, even thousands of computers and just as many traders wildly throwing their arms up, waving, yelling, and signaling to each other. Another type of stock exchange is virtual. They’re composed of a network of computers where trades are made electronically.

The stock market is one of the most important sources for companies to raise money. It allows a business to be publicly traded and raise money to expand by selling shares of ownership of the company in a public market. The maneuverability that an exchange affords the investors gives them the ability to sell securities more easily. This feature alone makes the stock market more attractive compared to other less liquid investments.

The largest and to some the most prestigious exchange in the world is the New York Stock Exchange (NYSE). Sometimes called “The Big Board”, the NY...