North AmericaSouth AmericaWestern EuropeEastern EuropeMiddle EastAfricaAsiaSoutheast Asia & Oceania

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What is an Exchange

An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. In the 1300's, the Venetians were recognized as one of the first to trade securities with a form of debt known as prestiti. In the 1500's, Belgium established the first formal stock market system in Antwerp.

There are over 300 stock exchanges, commodity exchanges and derivative exchanges around the world, each of which provide liquidity and an efficient platform to trade securities, options, futures or commodities.

What Regions have Exchanges

With each country having their own rules and regulations for securities and commodities trading, it is necessary to have a large universe of exchanges to meet each of their needs and requirements. Not all countries will have a formal exchange but exchanges are located on all continents, except Antarctica, and they are spread throughout all regions in the world.

We have divided up the globe into 8 regions, which are North America, South America, Western Europe, Eastern Europe, the Middle East, Africa, Asia and Southeast Asia & Oceania. You will find exchanges in each of these regions so you will have many good locations to search for good trading opportunities.

Benefits of a Stock Market or Exchange

A stock market or exchange is a vital part of a capital markets system and while it is often associated with wealth creation and capitalism, a stock market or exchange is much more than a place to buy and sell securities.

A stock market or exchange provides liquidity in the secondary market, which offers price stability and investor confidence. It also offers access to capital, allowing companies listed on a stock exchange to quickly raise affordable capital by issuing more shares for investors to purchase.

Companies that trade on an exchange can expect an enhanced company profile, the ability to attract better employees, an increase in the company valuation and a reduction in their cost of capital, all of which can improve a company's profitability.

For traders and investors, a stock exchange provides a venue for wealth creation. The value of money decreases over time due to inflation. Securities and investments traded on or through an exchange offers investors the ability to earn a better rate of return on their money and it can create greater wealth.

Benefits of a Derivative Market or Exchange

A derivative is a financial instrument that is derived from other forms of assets and it is generally used as a risk management tool or hedge. While some derivatives can be highly complex, they can be easy to trade.

A derivative exchange provides a market for derivative products to trade, offering lower transaction costs as compared with purchasing an asset outright. It will also assist in price discovery and market efficiency for the underlying asset.

Benefits of a Commodity Market or Exchange

A commodity is a basic good that can be consumed or used in commerce. It can be classified as a hard commodity, which are goods or natural resources that can be mined, such as gold, or extracted, such as oil. It can also be classified as a soft commodity, which are goods that can be grown, such as agricultural products, or raised, such as livestock.

A commodity exchange, similar to a derivatives exchange, generally functions as a risk management tool, providing liquidity, an efficient market and a hedge for unknown events. Investors can trade commodities on a commodities exchange at a small cost as compared to owning them due to a high degree of leverage in the products.

Knowledge is the Key

There are many venues to trade for profit or for risk management but knowledge is the key to success. It is important to not only understand the company or the product that you want to invest in but also the country risk, exchange liquidity and local market efficiency.

GlobEx Markets provides you with the tools to better understand your options as well as to improve your decision-making and success.

Sources: World Federation of Exchanges, Nasdaq, Investopedia

  • Wall Street Journal
  • Financial Times
  • Bloomberg
  • Nikkei Asian Review
  • Reuters