Insider Monkey

21 Largest Stock Exchanges in the World

Ramish Cheema
12 min read

In This Article:

In this piece, we will take a look at the 21 largest stock exchanges in the world. For more stock exchanges, head on over to 5 Largest Stock Exchanges in the World.

Every day, the stock market attracts countless investors who are either looking to make a buck, earn dividends, or buy the shares of their preferred companies to have a stake in them. The market is also known for offering great returns to lucky and astute investors, but by its very nature, is also risky since its fortunes rise and fall with that of the economy and the companies themselves. The availability of exchanges to everyone and not just institutional investors also leads to hundreds of billions of dollars of capital trading hands daily. For instance, on one of America's largest exchanges, the NASDAQ, a whopping $228 billion of trades were carried out on February 23, 2023, in the form of 4.6 billion shares and through 31 million trades excluding block trades. For America's largest exchange, the New York Stock Exchange (NYSE), 3.8 billion Consolidated Tape A shares (those of NYSE listed stocks) changed hands on the same day.

Naturally, this volume also makes stock exchanges the barometers of the economy, and as business becomes tougher, share prices fall since investors remove their capital from markets. The biggest examples are the stock market crashes of 2008 and 2021 when the NASDAQ Composite lost up to 42% of its value as the economic outlook soured.

When Wall Street finance first gained popularity and more firms raced into the market in the mid 1900s, traders would note each day's opening and closing prices and then would plot a graph manually. This would be carried out for a long time period, and the result would show the trend in a stock's price. These days though most of this process is done with computers, saving time and generating quicker insights.

However, the exchange market still has problems. For starters, non trading operations such as money transfers and account deposits still require manual operations. Envisioning one such digital future is Deloitte, which believes that the 'exchange of the future' will diversify from conducting stock market operations to investing in alternative revenue streams such as by providing data, creating 'sub markets' such as those for venture capitalists to buy and sell small companies, automate most of their workflows, enable greater automation for fraud detection, and broaden their horizon to new products such as initial coin offerings (ICOs).

One particularly growing area within exchanges that is gaining traction among retail traders too is options trading. While the history of options can be traced back to the 1800s, it was more than a century later when in 1968 the world's first options exchange, the Chicago Board Options Exchange (CBOE) opened. Simply put, an 'option' is the right to buy or sell a stock or commodity or currency at a pre agreed price on a future date. This enables the investor to profit from price movements. The outbreak of the coronavirus pandemic and the resulting retail interest in the stock market saw the options trade grow signficantly, with one report suggesting that whopping 39 million contracts traded daily in 2021 - to mark a 35% annual growth with retail traders accounting for a quarter of this activity. This bonanza would continue in 2022 when a massive $10 billion of contracts were traded in the U.S. for the first time in history, yet, the inability to close the options at the right time also led the retail traders to lose money.

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