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You’ve probably seen a stock ticker machine in an old movie. Old school stock activity and prices were transmitted by telegraph to a stock ticker, which ran a paper tape. To speed up the information process, the names of companies were abbreviated. Nowadays, stock trade data is transmitted in real time through very fast and sophisticated digital programs. Ticker machines are long gone, but stock abbreviations are still referred to as ticker symbols. Once shares are sold via the IPO, they enter the stream of commerce . Anyone, anywhere in the world can invest in the company. A school teacher in China can invest in the growth of a Brazilian company. A restaurant owner in Dublin may own shares in a Spanish auto parts company. Through stock markets, investment is truly globalized. Over the years, the shares may be resold (traded) many times over, going from investor to investor, each hoping to build their wealth by selling their shares for more than they paid. If the company is successful, the price of the shares will rise over time. Where Trades Happen The area at the stock exchange where trades happen is called the trading floor . It is chaotic and crowded. Trading opens at 9:30 (Eastern Standard Time) every morning, Monday through Friday, with the opening bell . Trading ends promptly at 4:00 with the closing bell . If you are a trader or stockbroker working on the west coast, your day starts very early, because you must watch trading closely to buy or sell shares at the best price. PRODUCT PREVIEW The World’s Biggest Stock Exchanges NYSE The NYSE is, by far, the biggest stock exchange in the world by volume of shares traded and value of the companies listed . Daily trading averages about $40 billion worth of shares. On March 20, 2015 over $115,000,000,000 worth of shares were traded in a single day! NASDAQ The NASDAQ (pronounced naz-dak ) is a U.S. based global electronic marketplace for buying and selling securities. It was founded in 1971 and is the second largest stock exchange in the world. It has no physical trading floor . It is a telecommunications network where all trades are made electronically. It’s known for its concentration of tech stocks , such as Microsoft, Apple, Google, Facebook, but lists many other industry stocks, including airline and pharmaceuticals. Overseas and Other Exchanges The NASDAQ is followed in size by the Tokyo Stock Exchange , the London Stock Exchange , the Shanghai (China) Stock Exchange , the Hong Kong Stock Exchange , Toronto Stock Exchange , BM&F Bovespa (Brazil) , the Australian Securities Exchange , and the Deutsche Börse , which is the German stock exchange. The American Stock Exchange (AMEX) is the third-largest stock exchange in the U.S. It’s located on Wall Street and handles about 10% of all securities traded in the U.S. SLIDE 14L
265 THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY
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