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Stock Exchange, the market place where selling and buying of securities of companies and municipal cooperations take place, and in some situation, of certificates on behalf of commodities of deal.

At first, Stock Exchanges provided liberty to anyone who wished to buy or sell cooperate securities; it was most likely with this purpose in vision that a number of the older exchanges, especially the Paris Bourse, were established in a buildings that was erected at communal expenditure. It was swiftly revealed that in order to put into effect bargains of some recognized associations was essential. Only limited clubs or other associations on the general basis use membership in stock exchanges. In the capitalistic economy the stock exchanges plays an important role. The investment bankers made the preliminary sales of corporate securities. From then on, Stock Exchanges make available markets in support of the securities, which enabled the original investors to put up for sale their securities as the necessity arises, and thus promoting the original investment.

The most important stock exchanges on the planet are the New York Stock Exchange, the London Stock Exchange and the Tokyo Stock Exchange. An additional significant exchange of a much fewer regulated class is the National Association of Securities Dealers Automated Quotation (NASDAQ). This is an automated (computerized) bazaar connecting dealers all the way through the United States and in a very small amount, the Europe nations. The second-biggest and best ever rising US stock market is NASDAQ, it provides the facilities of trading over-the-counter (OTC) securitieswhich have a tendency to be issued by some less recognized companiesalong with the shares of bigger companies like Microsoft.

NASDAQ is the best example to illustrate a common tendency towards enlarged competition plus the utilization of mechanized trading methods to put back the long-established stock exchange floor where brokers and dealers meet to trade in open outcry. In October 1986 i.e. the big bang which is

also known as the reorganization in which The London Stock Exchange has been entirely changed to computer-based stock exchange because of which the dealers are now able to see all prices on display monitor immediately. The New York Stock Exchange dissimilar to NASDAQ and the London Stock Exchange is preserving its trading floor system for trading. The traditional national exchanges have also faced amplified competition from fresh computerized trading systems produced by profitable firms. With the entrance of high-speed working machines called computers and advancement in information technology in the field of stock market, the expenditure of providing a national stock bazaar for shares by means of computer screens has gone down noticeably.

Use of different trading systems can occasionally perhaps decrease the transaction expenses and it in addition avoids a number of the regulations that recognized stock exchanges without doubt imposes on buyers. It is probable to purchase and sell French shares on the Indian stock market, by means of the Stock Exchange Automated Quotation International (SEAQ International) method. SEAQ International has been spectacularly successful in seizing different market share of different companies from the local Stock Exchanges of lots nations. And it has affected exchanges to such an extent that, for a number of nations, a better amount of trades take place in the NASDAQ exchange as compared to the trade on their possessed exchanges.

The trading systems of stock exchanges have separated into two wide groups because of the increased act of competing between exchanges.

First category consists of some of the leading exchanges like London, NASDAQ, Paris stock exchanges which uses the market maker system. According to this method market makers decides the price at which are ready to purchase and put up for sale every share. Shareholders are able to observe the cost of shares. The stock market will decide that at what prices all the trades should take place which came out to be the best deal for shareholder, the highest price for seller and lowest for buyer. Each and every rate is displayed on computer display monitor, and market makers are dedicated to adjust their rates for trades up to normal market size (or NMS). The rates above the NMS market makers rate are indicative only above which trade is note possible, and the deal with the market makers will confirm the rate for the share to be sell. The benefits of this method are instant implementation of instructions, and cost assurance at instance of time.

The auction system is the other kind of trading method, in this case all purchase and put up for sale orders from shareholders are collected jointly and compared against each other, and the best deal is finalized to clear the market. A most important instance of auction-based method is the Paris Bourse stock exchange. Auctions are usually operated by computer which can be continuous, or auctions which occur once or twice a day also known as batch auctions. The benefit of this type of method is its cheapness (in this no one is paying for the facilities provided by market makers), demerit of this method is that it may not be probable to trade right away or at a recognized cost.

Stock Exchanges in the world are growing rapidly, and they are forced to face rivalry from other recognized stock exchanges, some times from new but high-tech stock exchanges. With the grow of information technology and computer industries there will be opening of new ways for very high tech stock exchanges to lag behind well known exchanges. It appears to be possible that there will be a sustained tendency that concentration of share trading will be high only at a few leading centers, and the domestic stock exchanges in a number of nations becoming increasingly out of use.

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