Last Updated on March 13, 2022
An exchange is a platform where the transfer of goods whether tangible or intangible is being facilitated. The stock exchange is a major part of the stock market. It is a platform that provides/facilitates the exchange/trade of the stocks of the companies registered on the stock exchange. Companies offer their shares to the public, domestic institutional investors (DIIs), foreign institutional investors (FIIs), and others through IPO or offer for sale (OFS) in the primary market.
These shares are then listed on the recognized stock exchanges for further trading. It is also called a secondary market for trading stocks.
In the past, before the introduction of the computer, the exchange of stocks was made through an open outcry system. Brokers received orders from their clients to buy or sell stocks.
Brokers then list down the orders in their books and execute the clients’ orders by shouting the name of the stock in the open ring, floor, or similar facility which was established to facilitate stock trading.
At the present time, the exchange of stocks is done through an online medium with the use of computer technologies. The traders’ or individuals have to open a Demat account through the brokerage firms or brokers. Specified client identification is provided to the Demat account & its holder.
Traders or individuals after opening a Demat account will provide a trading account from which they can execute the trade of stocks directly online or they can direct their brokers to execute the order on his/her behalf.
The stock exchanges provide the price, volume of trades, number of traders’, technical charts, open interest, and other related information regarding the stocks of the companies listed on these exchanges on a real-time basis. Along with stocks, derivatives, exchange-traded funds (ETFs), bonds, and indices were also traded on these exchanges. Traders’ can track the price movement of the stocks, technical data, and other key information on the exchange websites.
Stock exchanges are regulated by the governing body specifically made for that purpose. In the USA the regulatory body is Securities and Exchange Commission (SEC), in japan the Japan Exchange Regulation (JPX-R), and in India, the Securities and Exchange Board of India (SEBI) upholds this task. Similarly, in other counties, distinct regulatory bodies are there to govern these stock exchanges.
Most of the countries in the world have their own exchanges for stock trading. Some of the exchanges around the globe are:-
Top 11 Stock exchange in world
Stock Exchange of USA
1. New York Stock Exchange (NYSE)
In 1792, the New York Stock Exchange (NYSE) was founded and established at 68 wall street in New York. It became a public company in 2006 and later in 2007, merged with Euronext of Europe.
In 2008, NYSE acquired the Stock Exchange of America and in 2013, NYSE is acquired by the Intercontinental Exchange (ICE). Currently, the exchange is known as NYSE: ICE.
NYSE features a unique market model that consists of Designated Market Makers (DMMs) and automated auction technology that includes algorithmic quotations which help in reducing the market volatility.
The market capitalization as of 2021 is the U.S $26.2 trillion and has 2800 companies listed on the exchange. NYSE provides excess to 7 of its arms in equities, derivatives, exchange-traded funds (ETFs), Bond markets namely NYSE American, NYSE Arca Equities, NYSE National, NYSE Chicago, NYSE American Options, NYSE Arca Options, NYSE Bonds.
Major indices listed on NYSE are NYSE Composite (DJ), NYSE US 100 INDEX, Dow Jones Industrial Average, S&P 500 Index, NYSE FANG+TM Index, The NYSE Bitcoin Index.
NYSE Trading hours: Monday-Friday
- Pre-opening session: 06:30 a.m. Eastern Time Zone.
- Core-open auction: 09:30 a.m. Eastern Time Zone.
- Closing auction: 04:00 p.m. Eastern Time Zone.
With the introduction of the world’s first electronic stock market in 1971, NASDAQ was established. The full form of the NASDAQ is the National Association of Securities Dealers Automated Quotations. It became popular as an Over-the-counter market because of its huge dealings in securities over-the-counter.
In 2008, NASDAQ acquired OMX the leading stock exchange of Nordics. It has a presence in six continents around the globe. It trades in the global markets by the symbol NDAQ.
It has more than 3500+ companies listed and the market capitalization as of 2021 is the U.S $19.4 trillion.
Major indices listed on NASDAQ are the NASDAQ Composite Index, NYSE Composite, S&P 500, Russell 2000, NASDAQ-100 Index.
NASDAQ Trading hours: Monday-Friday
- Opens: 09:30 a.m. Eastern Time Zone
- Closes: 04:00 p.m. Eastern Time Zone
Stock Exchange of Japan
3. Tokyo Stock Exchange (TSE)
It was established on 15 May 1878 at Kabuto-cho district (currently as Nihonbashikabutocho) Tokyo, Japan. In that period the trading-floor employees work in kimono (a traditional Japanese garment). In 1943, 11 stock exchanges across japan merged to form the Japanese securities exchange.
In 1947, the Japanese stock exchange was dissolved. In 1949, trading at the Tokyo stock exchange was restarted and in the 1990s, computerized systems were introduced which eased and accelerated the operations at TSE.
In 2000, the Hiroshima stock exchange and Niigata stock exchange merge into TSE. In 2013, Japan Exchange Group, Inc. (JPX) was founded and established with the integration of the Osaka securities exchange and Tokyo stock exchange group.
As of 2021, the market capitalization of JPX is approx. U.S $6.9 trillion and more than 3700+ companies listed.
Major indices listed on JPX are TOPIX, JPX-Nikkei 400, Mothers Index, JASDAQ Index, Nikkei 225.
TSE Trading hours: Monday-Friday
- Morning session: 09:00 a.m. – 11:30 a.m.
- Afternoon session: 12:30 p.m. – 03:00 p.m.
Stock Exchange of India
4. National Stock Exchange (NSE)
It was established in 1992 in Mumbai, Maharashtra, and commenced its operations in 1994, by launching the equity and wholesale debt market segment for trading. Electronic screen-based trading was also introduced by NSE.
In 1995, the Nifty-50 index was launched and in 2007, it became India’s first exchange that offers currency derivatives trading. In 2011, for listing and trading of securities of Small and Medium Enterprises (SMEs) a platform EMERGE was launched. In 2019, NSE was recognized as the world’s largest derivatives exchange.
The trading of securities is conducted via a screen-based trading system known as National Exchange for Automated Trading (NEAT) and it also offers trading via customizable Non-NEAT platforms through Computer-To-Computer-Link (CTCL) scheme.
As of 2021, the market capitalization of NSE is approx. U.S $3.40 trillion and 2000+ companies listed.
Major indices listed on NSE are NIFTY 50, NIFTY NEXT 50, NIFTY MIDCAP 50, NIFTY SMALLCAP 50, INDIA VIX, Sectoral Indices: Nifty Bank, etc., Strategy Indices: Nifty50 Value 20, etc., Thematic Indices: Nifty Commodity, etc., and so on.
NSE Trading hours: Monday-Friday
- Pre-open session: 09:00 a.m. – 09:08 a.m.
- Regular trading session: 09:15 a.m. – 03:30 p.m.
- Closing session: 03:40 p.m. – 04:00 p.m.
5. Bombay Stock Exchange (BSE)
BSE is located at Dalal Street, Mumbai. It was established in 1875, as the first stock exchange in Asia, and in the same time period, the Native Share and Stock Broker’s Association was formed.
In 1986, BSE launched S&P BSE SENSEX which was India’s first equity Index. In 1995, an online trading system was introduced by BSE with the name BOLT.
In 2005, BSE was incorporated as Bombay Stock Exchange Limited and became a corporate entity. In 2010, BSE introduced mobile-based trading. In 2012, it launched the Small and Medium Enterprise exchange platform.
It became India’s first listed stock exchange in 2017. In 2018, by launching a commodity derivatives segment it became India’s first universal exchange. The S&P BSE SENSEX Index is widely tracked and traded internationally on EUREX a European exchange and leading exchanges of Brazil, Russia, China, and South Africa.
As of 2021, the market capitalization is the U.S $3.4 trillion, and 5400+ companies are listed on BSE.
Major Indices listed on BSE are S&P BSE Sensex, S&P BSE 100, S&P BSE Bharat 22 Index, S&P BSE All Cap, S&P BSE PSU, S&P BSE IPO, S&P BSE Carbonex, S&P BSE India Bond Index, and so on.
NSE Trading hours: Monday-Friday
- Pre-open session: 09:00 a.m. – 09:15 a.m.
- Continous: 09:15 a.m. – 03:30 p.m.
- Closing session: 03:30 p.m. – 03:40 p.m.
- Post-close session: 03:40 p.m. – 04:00 p.m.
Stock Exchange of UK
6. London Stock Exchange (LSE)
It started spreading its roots in 1698, from Jonathan’s coffee house in London. In 1773, in Sweeting’s Alley, a formal club was made with the name new Jonathan’s or the stock exchange.
In 1801, the first regulated stock exchange was established and in 1812, a rule book regarding trade settlements to maintaining decorum of the exchange building was introduced. In 1840, the exchange adopted telegram technology followed by a ticker tape machine and telephone.
In 1970, real-time prices of securities are available to brokers with the introduction of the Market price display system. In 1984, the Financial Times Stock Exchange 100 Index or FTSE 100 was launched.
In 1986, the stock exchange was deregulated and the trading mechanism was changed to fully computerized trading. In 1995, the Alternative Investment Market (AIM) was launched for providing access to capital to smaller companies.
In 2004, LSE was transferred to 10 Paternoster, Square, near St. Paul’s Cathedral and in 2007, it merged with Borsa Italiana of Italy and became the London Stock Exchange Group (LSEG).
As of 2021, the market capitalization of LSEG is approx. U.S $5.1 trillion and 2400+ companies listed.
Major Indices listed on LSE are FTSE 100, FTSE 250, FTSE 350, FTSE All-Share, FTSE AIM UK 50 Index, FTSE ORB Index, FTSE 4 Good Global Index, and so on.
LSE Trading Hours
- Market open: 07:00 a.m. – 07:15 a.m.
- Auction call: 08:00 a.m. – 04:35 p.m.
- Market close: 05:15 p.m.
Stock Exchange of China
7. Shanghai Stock Exchange (SSE)
In 1891, the Shanghai Share Brokers association was formed. In 1946, the Shanghai-Chinese Securities exchange’s name changed to Shanghai Securities Exchange Company Limited.
In 1990, the Shanghai Stock exchange (SSE) was established in mainland china and started its operations. In 2003, it launched its first Exchange Traded Fund (ETF)-SSE 50 ETF and get listed on the exchange. In 2014, it launches a platform to link investment in securities in the Shanghai exchange and Hong Kong exchange namely Shanghai-Hong Kong Stock Connect.
In 2019, SSE Star Market was launched to support emerging and Hi-tech industries. As of 2021, the market capitalization of the Shanghai Stock Exchange (SSE) is approx. U.S $7.6 trillion and 2000+ Companies listed.
Major Indices listed on SSE are SSE Composite, SSE 50, STAR 50, SSE 180, SSE 380, CSI 300, SSE B Share Index, SSE Fund Index, and so on.
SSE Trading hours: Monday-Friday
- Opening call auction: 09:15 – 09:25 hrs.
- Continous call: 09:30 – 11:30 hrs. & 13:00 -14:57 hrs.
- Closing call auction: 14:57 -15:00 hrs.
- Block trading: 15:00-15:30 hrs.
8. Stock Exchange Of Hong Kong (HKEX)
In 1891, the Stockbrokers’ Association of Hong Kong was established. Later in 1914, it was renamed as Hong Kong Stock Exchange. In 1921, one more exchange was formed with the name Hong Kong Stockbrokers’ Association.
The second world war was ended and in 1947, the two exchanges were merged together to form a uniform body as the Hong Kong stock exchange (HKEX).
From 1969 to 1972, three more stock exchanges were established namely the Far East Exchange, the Kam Ngan Stock Exchange, the Kowloon Stock Exchange. In 1980, the unification of the four exchanges leads to the formation of the Stock Exchange of Hong Kong Limited (SEHK).
In 1986, a computer-assisted system was introduced for trading and settlement. In 2000, the exchange merged with the Hong Kong Futures Exchange (HKFE). In 2012, the Hong Kong Stock Exchange made the acquisition of the London Metal Exchange (LME).
The market capitalization of HKEX as of 2021, is the U.S $5.79 trillion and 2500+ companies listed.
Major indices listed on HKEX are Hang Seng Index, Hang Seng China Enterprises Index (HSCEI), Hang Seng Tech Index, CES China 120 Index, CSI 300 Index, and so on.
HKEX Trading hours
- Pre-opening session: 09:00 a.m. – 09:30 a.m.
- Morning session: 9:30 a.m, – 12:00 p.m.
- Extended morning session: 12:00 p.m. – 01:00 p.m
- Afternoon session: 01:00 p.m. – 4:00 p.m.
Stock Exchange of Australia
9. Australian Securities Exchange (ASX)
In Australia, trading was first started in 1800. In 1871, the Sydney Stock Exchange was established and implemented governing rules for stockbrokers. Later in 1884, the Brisbane Stock Exchange and the Stock Exchange of Melbourne were established.
In 1937, the Australian Associated Stock Exchanges (AASE) was formed. It provides common listing requirements rules along with brokerage, commissions, etc. In 1959, the Sydney Stock Exchange replaced the auction-based call trading system with the post-trading system.
In 1960, the Sydney Stock Exchange moved to Kindersley house. In 1964, the computer system was adopted to make efficient clearinghouse functions and broker-client accounting. In 1969, an electronic price dissemination system was adopted that make ease the stockbrokers’ functions.
In 1976, the Australian Options Market was established. In 1987, the amalgamation of six states stock exchanges together results in the formation of the Australian Stock Exchange Limited (ASX). In 1998, ASX was demutualized and listed on the exchange.
In 2006, the Sydney Futures Exchange (SFE) and the Australian Stock Exchange (ASX) merged together to formed the Australian Securities Exchange (ASX). In 2010, the Australian Securities Exchange changed to ASX Group.
As of 2021, the market capitalization of ASX is approx. U.S $1.7 trillion and 2200 companies listed.
Major indices listed on ASX are S&P/ASX200, All Ordinaries, S&P/ASX 50, S&P/ASX 200 VIX Index, S&P/ASX MIDCAP 50, S&P/ASX 200 Financials (Sector), S&P/ASX 200 GROSS TOTAL RETURN INDEX (GTR), and so on.
ASX Trading hours: Monday-Friday
- Pre-opening session: 07:00 a.m. – 10:00 a.m.
- Normal trading session: 10:00 a.m. – 4:00 p.m.
Stock Exchange Of Germany
10. Frankfurt Stock Exchange (Börse Frankfurt)
For Germany, stock trading took its origin from the medieval trade fairs in the 11th century. Frankfurt becomes an important city for goods and money trading. In the 16th century, wholesale banking and trades were started in Frankfurt.
Due to the complex money exchange system as there was no standard money in Europe and Germany the entire trading system becomes difficult. In 1585, to cope-up with this struggle, the merchants of the trade fair agreed upon a standard and uniform exchange rate system.
In 1605, the merchant used the term “Börse” to address the meetings held for the purpose of a uniform pricing system. These meetings were held at Römerberg at an open square in front of the town hall in Frankfurt.
In 1625, the official price list was distributed containing the average price for twelve types of currencies. In 1682, the stock exchange regulation was issued and an official administration of the exchange was established.
In the 17th century, the trading in promissory notes and bonds started and in the 18th century, the exchange become the part of the chamber of commerce and become a public institution. During this period government securities were also started trading.
In 1820, the first share of the Austrian National Bank was listed on the Frankfurt exchange. In 1969, the exchange started processing a few segments of data in electronic mode with the introduction of ‘Xetra’ and after in 1988, blue-chip companies index, DAX was introduced.
As of 2021, the market capitalization of the U.S $2.45 trillion, and 303 companies are listed.
Major indices listed on FRA are DAX, MDAX, SDAX, TecDAX, Scale, Dow Jones, Euro Stoxx 50, S&P 500, and so on.
Börse Frankfurt Trading hours: Monday-Friday
- Opening Auction: 08:50 a.m.
- Trading Session: 09:00 a.m. 05:30 p.m.
- Closing Auction: 05:30 a.m.
11. Stock Exchange of Thailand (SET)
The exchange is situated at Din Daeng, Bangkok, Thailand. The origin of Thailand’s securities market traces back to the 1960s. In 1962, the first stock exchange of Thailand was established as the Bangkok Stock Exchange.
In 1963, the Bangkok Stock Exchange became a limited company. In 1970, the exchange ceased its operations and closed. In 1975, the Securities Exchange of Thailand was established and started its operations and in 1991, the exchange name was changed to Stock Exchange Of Thailand (SET).
In 2004, a subsidiary of SET, the Thailand Futures Exchange (TFEX) was established as a derivative exchange.
The SET Group comprises related entities like Market for Alternative Investment (MAI), Bond Electronic Exchange (BEX), Thailand Futures Exchange Pcl (TFEX), Thailand Securities Depository Co., Ltd. (TSD), Thailand Clearing House Co., Ltd. (TCH), and Settrade.com Co., Ltd.
The market capitalization of SET as of 2021 is approx. U.S $0.58 trillion and 800+ companies listed.
Major indices listed on SET are SET50, SET100, sSET, SETCLMV, SETHD, SETTHSI, SETWB, mai, FTSE SET Large Cap, FTSE SET Shariah, and so on.
TSE Trading hours: Monday-Friday
- Pre-open session: 09:30 a.m. – T1
- Trading session1: T1 – 12:30 p.m.
- Pre-open session2: 02:00 p.m. – T2
- Trading session2: T2 – 04:30 p.m.
- Pre close: 04:30 p.m. – T3
- Off-hour: T3 – 05:00 p.m.
- T1 is the random opening time between 09:55 a.m. – 10:00 a.m.
- T2 is the random opening time between 02:25 p.m. – 02:30 p.m.
- T3 is the random closing time between 04:35 p.m. – 04:40 p.m.
Apart from the mentioned stock exchanges, there are 40 more stock exchanges around the globe.
He is graduate in M.B.A Finance, and owner of the financial blog “Saifwealth.com“. He started this blog to share his knowdelge in the field of finance and to help people understand and aware about the financial world.