An exchange is any centralized financial marketplace where a variety of securities, such as equities, commodities, futures, and options, can be traded by investors.

Exchanges exist to facilitate transactions between buyers and sellers and ensure that all parties can access fair, organized, and efficient information related to the products being traded. Most developed countries have financial exchanges and offer multiple avenues through which to execute orders. Exchanges formerly only existed as a physical location where traders gathered and negotiated prices in person or via phones through brokers. However, exchanges are now primarily offered electronically and allow investors worldwide to come together in a virtual marketplace.

When traders enter market orders, the orders are routed to exchanges. The order may be sent to a specific exchange selected by the trader or to whichever exchange has the best price quote for the order, known as smart order routing.

Pakistan Stock Exchange

Pakistan Stock Exchange was established on September 18, 1947 and was formally incorporated on March 10, 1949 under the name of ‘Karachi Stock Exchange’, as a Company limited by Guarantee. In October 1970, a second stock exchange was established in Lahore to meet the stock trading needs of the provincial metropolis. In October 1989, Islamabad Stock Exchange was established to cater to the investors of the northern parts of the country. Because the three exchanges had separate management, trading interfaces, indices, and had no mutualized structure, therefore the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 was promulgated by the Government of Pakistan which ultimately resulted in the three exchanges integrating their operations effective January 11, 2016 under the new name ‘Pakistan Stock Exchange Limited’ (PSX).

New York Stock Exchange (NYSE)

The New York Stock Exchange (NYSE) is the largest stock exchange in the world. The New York Stock Exchange was founded in 1792. Located on Wall St. in Manhattan, the NYSE is home to the largest market capitalization of listed companies. Publicly traded companies are listed on the exchange, including many of the U.S.’s oldest and largest companies.

While the exchange floor is still open for live open outcry trading, the majority of transactions are conducted electronically. In 2007, the NYSE merged with the largest stock exchange in Europe, Euronext, to form NYSE Euronext.

American Stock Exchange (AMEX)

The American Stock Exchange (AMEX) was once the third-largest stock exchange in the United States. NYSE Euronext acquired AMEX in 2008 and it is now known as NYSE American. The exchange is primarily focused on small-cap companies in the United States and is fully electronic. AMEX was responsible for introducing the first publicly traded ETF in 1993.

Chicago Board Options Exchange (CBOE)

The Chicago Board Options Exchange (CBOE) is the world’s largest options exchange. The CBOE provides trading for numerous securities types beyond options, including futures, domestic and international equities, foreign exchange currencies, and volatility products.

The CBOE has evolved into a multi-functional business operation known as Cboe Global Markets, Inc. The exchange is now an asset of a larger corporation, including an educational department (The Options Institute) and a clearinghouse for all options trades within the United States (the OCC).

NASDAQ

The NASDAQ exchange is an electronic marketplace. It was the first entirely computerized exchange to allow investors to trade securities electronically and has no trading floor like the NYSE. NASDAQ stands for National Association of Securities Dealers Automated Quotations.

Since its inception, the NASDAQ exchange has specialized in the technology sector. The NASDAQ lists more than 3,000 companies on its exchange and commodities, ETFs, and other products.