Where Stocks Trade
from ClearStation.com
Billions of shares of stocks are traded every day—ever wonder where it all happens?
Stocks are traded on exchanges. An exchange can be classified as either a "securities and commodities exchange" or "over the counter." What that means is that the exchange is subject to the rules and guidelines of its governing body.
The securities and commodities exchanges are organized, national entities where securities, commodities (bulk items like food and metals), futures contracts, and options are traded. Members of these exchanges handle the trades for themselves and their clients. Know those scenes you see in movies where people wearing funny coats are running all over the place frantically trading stocks? Chances are they are representing these exchanges.
Securities and options are regulated by the SEC (Securities and Exchange Commission) while commodities are governed by the Commodity Futures Trading Commission. The New York Stock Exchange (NYSE) and American Stock Exchange (AMEX) are grouped here. Other exchanges include the Chicago Options Exchange (CBOE), the Philadelphia Stock Exchange, and the Pacific Stock Exchange to name a few.
For the over-the-counter market, trades are handled electronically—either via telephone or computer. The over-the-counter (OTC) stocks usually belong to smaller companies that were not able to meet the strict requirements of the NYSE or AMEX. Sometimes companies go with OTC just because they prefer the way things work: there are many dealers who can execute trades whereas on the securities and commodities exchanges trades for a stock would have to go through the specialist that handles that particular stock. Regulated by the National Association of Securities Dealers, NASDAQ provides the automated quotes for this market.
As a final note, OTC Bulletin Board stocks (OTCBB or simply BB) are stocks that trade over-the-counter but do not have a high enough value to trade on NASDAQ. They are also known as penny stocks.
0 التعليقات:
إرسال تعليق