Types of stock exchanges

Types of stock exchanges

There are two main types of stock exchanges:

Physical stock exchanges: These are traditional stock exchanges where buyers and sellers physically meet at a physical location, typically a trading floor, to trade stocks. The buyers and sellers place their orders through brokers who are present on the trading floor. Physical stock exchanges are becoming less common with the increasing adoption of electronic trading.

Electronic stock exchanges: These are stock exchanges where buyers and sellers trade stocks electronically, using computers and other electronic devices. Electronic stock exchanges have no physical trading floor, and orders are matched electronically. Electronic stock exchanges have become the norm in recent years, with the rise of electronic trading platforms and the increasing adoption of high-frequency trading. Some examples of electronic stock exchanges include the NASDAQ, NYSE Arca, and BATS Global Markets.

In addition to these two main types, there are also regional stock exchanges, which are smaller stock exchanges that serve specific regions or industries. These exchanges typically have fewer listings and lower trading volumes than the major stock exchanges. Examples of regional stock exchanges in the United States include the Chicago Stock Exchange and the Philadelphia Stock Exchange.

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