Exchange (organized market)

Exchange (organized market)

An exchange (or bourse) is a highly organized market where (especially) tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought.

Contents

Description

Exchanges bring together brokers and dealers who buy and sell these objects. These various financial instruments can typically be sold either through the exchange, typically with the benefit of a clearinghouse to cover defaults, or over-the-counter (OTC), where there is typically less protection against counterparty risk from clearinghouses[1] although OTC clearinghouses have become more common over the years, with regulators placing pressure on the OTC markets to clear and display trades openly.[2][3]

Exchanges can be subdivided:

In practise, futures exchanges are usually commodity exchanges, i.e. all derivatives, including financial derivatives, are usually traded at commodity exchanges. This has historical reasons: The first exchanges were stock exchanges. In the 19th century, exchanges were opened to trade forward contracts on commodities. Exchange traded forward contracts are called futures contracts. These commodity exchanges later started offering future contracts on other products, such as interest rates and shares, as well as options contracts. They are now generally known as futures exchanges.

For details see:

History

The name bourse comes from the place where the traders met. It was the house of Ter Beurze in Bruges.

See also

Notes

  1. ^ Stock Exchanges are the most publicly recognized places for buying and selling shares. They are easily the single most important component of the secondary market for corporate shares. Over-the-Counter Options. About.com.
  2. ^ OTC Clearing 'FIX'ed Up!. Fix Global.
  3. ^ A Focus on OTC Clearing Innovation. IntercontinentalExchange.

References

External links


Wikimedia Foundation. 2010.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • exchange — ex·change n 1 a: a giving of something of value (as real property) in return for something of equal value (as money or property of a like kind) b in the civil law of Louisiana: a giving of something of value in return for something of equal value …   Law dictionary

  • Exchange-traded fund — An exchange traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks.[1] An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs… …   Wikipedia

  • Market maker — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

  • Market identification code — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

  • exchange — I. noun Usage: often attributive Etymology: Middle English exchaunge, from Anglo French eschange, from eschanger to exchange, from Vulgar Latin *excambiare, from Latin ex + cambiare to exchange more at change Date: 14th century 1. the act of… …   New Collegiate Dictionary

  • market — 1) An arena in which buyers and sellers exchange goods and services, usually for money. It does not have to have a physical location. 2) An organized gathering for trading in financial obligations, such as a stock exchange, commodity market, etc …   Big dictionary of business and management

  • commodity exchange — an exchange for the buying and selling of futures contracts on commodities, as butter, coffee, sugar, and grains. [1930 35] * * * Organized market for the purchase and sale of enforceable contracts to deliver a commodity (such as wheat, gold, or… …   Universalium

  • market — mar·ket n 1: the rate or price at which a security or commodity is currently selling: market price 2 a: a geographical area of demand for commodities or services seeking new foreign market s b: a formal organized system en …   Law dictionary

  • organized crime — n. a system or organization of people and groups engaged in criminal activities * * * Crime committed on a national or international scale by a criminal association; also, the associations themselves. Such associations engage in offenses such as… …   Universalium

  • organized labour — Introduction also called  trade unionism,        association and activities of workers in a trade or industry for the purpose of obtaining or assuring improvements in working conditions through their collective action. Great Britain (United… …   Universalium

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”