Exchange - Stock Exchanges, Futures Exchanges, The Auction Market Principle, Computerized And Over-the-counter Trading

securities commodity spot commodities

An association, organization, or group of persons, incorporated or unincorporated, that constitutes, maintains, or provides a marketplace or facilities for bringing together purchasers and sellers of SECURITIES or commodities futures.

A security is a written proof of ownership of an investment, usually in the form of shares of stock, which are fractional units of ownership in a company. Commodities are raw materials, like wheat, gasoline, or silver, that are sold either on the spot market, where cash is paid "on the spot," or through futures contracts, where a price for a contract is set in advance, not to be changed even if the market price for the commodity increases or decreases by the time the contract comes due.

CROSS-REFERENCES

Broker; Commodity Futures Trading Commission; Securities; Securities and Exchange Commission.

Additional Topics

Exchange - Stock Exchanges

The New York Stock Exchange (NYSE) and the American Stock Exchange are located on Wall Street, in New York City. Wall Street (named for a stockade built to protect the original settlers) is the busiest hub of securities trading in the United States. There are five other, Traders buy and sell commodity futures on the floor of the Kansas City Board of Trade in 2001. AP/WIDE WORLD PHOTOS smal…

Exchange - Futures Exchanges

Futures contracts for commodities are traded on one of 11 commodities exchanges in the United States, or on other exchanges throughout the world. Each futures contract is tied to the exchange that issued it. Exchanges specialize in various commodities, including currency and financial futures. For example, the Chicago Mercantile Exchange deals in meat, livestock, and currency, and the Minneapolis …

Exchange - The Auction Market Principle

The floor of a stock or futures exchange operates on the "auction market" principle, whereby brokers meet face-to-face on the floor of the exchange to execute buy and sell orders. Futures exchanges operate on a pure auction system, often referred to as the open outcry system, where all trading takes place on the floor of the exchange, or "in the pit." Buyers and sellers…

Exchange - Computerized And Over-the-counter Trading

Computer technology has been introduced in the major exchanges to automate certain aspects of transactions, but the auction process remains the predominant method of trading securities in these forums. In fact, the statutory definition of an exchange in the Securities Exchange Act has been consistently interpreted not to include computerized trading. Stocks not traded on an exchange have historica…

Exchange - Further Readings

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