An exchange, bourse (/bʊərs/), trading exchange or trading venue is an organized market where (especially) tradable securities, commodities, foreign exchange, futures, and options contracts are bought and sold.
History
12th century: Brokers on the Grand Bridge, France
In the twelfth century, foreign exchange dealers in France were responsible for controlling and regulating the debts of agricultural communities on behalf of banks. These were actually the first brokers. They met on the Grand Bridge in Paris, the current Pont au Change. It takes its name from the forex brokers.[citation needed]
13th century: Huis ter Beurze, Belgium
The term bourse is related to the 13th-century inn named "Huis ter Beurze" owned by family in Bruges, Belgium, where traders and foreign merchants from across Europe, especially the Italian Republics of Genoa, Florence and Venice, conducted business in the late medieval period. The building, which was established by Robert van der Beurze as a hostelry, had operated from 1285. Its managers became famous for offering judicious financial advice to the traders and merchants who frequented the building. This service became known as the "Beurze Purse" which is the basis of bourse, meaning an organized place of exchange. Eventually, the building became solely a place for trading in commodities.
During the 18th century, the façade of the Huis ter Beurze was rebuilt with a wide frontage of pilasters. However, in 1947 it was restored to its original medieval appearance.[citation needed]
13th century–17th century: Italian city-states, Belgium and the Netherlands
In the thirteenth century, the Lombard bankers were the first to share state claims in Pisa, Genoa, and Florence. In 1409, the phenomenon was institutionalized by the creation of the Exchange Bruges. It was quickly followed by others, in Flanders and neighboring countries (Ghent and Amsterdam). It is still in Belgium and the first building designed to house a scholarship was built in Antwerp. The first scholarship organized in France was born in Lyon in 1540.[citation needed]
The first documented crash took place in 1636 in Holland. The prices of tulip bulbs reaching excessively high levels, known as the Tulip mania. The price collapsed on October 1.
In the seventeenth century, the Dutch were the first to use the stock market to finance companies. The first company to issue stocks and bonds was the Dutch East India Company, introduced in 1602.
17th century: England and France
The London Stock Exchange started operating and listing shares and bonds in 1688.
The Paris Stock Exchange was founded in 1724. In 1774, the courts required that it be shouted[clarification needed] to improve the transparency of operations.[citation needed]
Contemporary history
In the nineteenth century, the industrial revolution enabled rapid development of stock markets, driven by the significant capital requirements for the finance industry and transport. Since the computer revolution of the 1970s, there has been a dematerialization of securities traded on the stock exchange.[citation needed]
In 1971, Nasdaq became the world's first electronic stock market. In France, the dematerialization was effective from November 5, 1984.[citation needed]
The development of information technology during the late part of the 20th century led to a new type of electronic exchange that replaced the more traditional physical markets. This led to new definitions in financial regulations that recognized these new exchanges, such as the multilateral trading facility in Europe and alternative trading system in the United States. Regulators also started using the term trading venue to describe the wider definition which encompasses both traditional exchanges and electronic exchanges.
Description
Exchanges bring together brokers and dealers who buy and sell these objects. These various financial instruments can typically be sold either through the exchange, typically with the benefit of a clearing house to reduce settlement risk.
Exchanges can be subdivided:
- By objects sold:
- Stock exchange or securities exchange
- Commodities exchange
- Foreign exchange market – is rare today in the form of a specialized institution
- By type of trade:
- Classical exchange – for spot trades
- Futures exchange or futures and options exchange – for derivatives
In practice, futures exchanges are usually commodity exchanges, i.e., all derivatives, including financial derivatives, are usually traded at commodity exchanges. This has historical reasons: the first exchanges were stock exchanges. In the 19th century, exchanges were opened to trade forward contracts on commodities. Exchange-traded forward contracts are called futures contracts. These "commodity exchanges" later started offering future contracts on other products, such as interest rates and shares, as well as options contracts; now they are generally known as futures exchanges.
For details, see:
- Stock exchange (securities exchange), List of stock exchanges, Category:Stock exchanges
- Commodity exchange (futures exchange), List of futures exchanges, Category:Futures exchanges
- Foreign exchange market
See also
- Commodity market
- Private electronic market
- Stock market
- List of stock exchanges
- Over-the-counter (finance)
Notes and citations
- Notes
- The term bourse is derived from (Ancient Greek: βύρσα, romanized: bursa, lit. '"the skin stripped off a hide"') which was later used as bursa in Medieval Latin to refer to the "purse".
- Citations
- "Word of the Day / Bursa: You Can Invest in This Word". Haaretz.
- Bourse. Online Etymology Dictionary
- "The stock market: from the 'Ter Beurse' inn to Wall Street". nbbmuseum.be. Archived from the original on 2019-08-12. Retrieved 2018-04-09.
- Kindleberger, Charles P. and Aliber, Robert (2005). Manias, Panics, and Crashes. A History of Financial Crises. New York. p. 16. ISBN 0-465-04380-1.
{{cite book}}: CS1 maint: location missing publisher (link) CS1 maint: multiple names: authors list (link) - Crump, Thomas (1 March 2006). "The Dutch East Indies Company – The First 100 Years [Transcript]". Gresham College (Gresham.ac.uk). Retrieved 21 August 2017.
- Ban, Zoltan (2011-12-30). Sustainable Trade: Changing the Environment the Market Operates In, Through Standardized Global Trade Tariffs. Author House. ISBN 978-1-4685-0594-8.
- White, Eugene N. (2003), Rosenthal, Jean-Laurent; Sokoloff, Kenneth L.; Hoffman, Philip T.; Engerman, Stanley L. (eds.), "The Paris Bourse, 1724–1814: Experiments in Microstructure", Finance, Intermediaries, and Economic Development, Cambridge: Cambridge University Press, pp. 34–74, doi:10.1017/cbo9780511510892.004, ISBN 978-0-521-82054-7, retrieved 2022-10-28
- "A History of Trading". WSJ. May 23, 2017. Retrieved May 3, 2024.
- Stock Exchanges are the most publicly recognized places for buying and selling shares. They are easily the single most important component of the secondary market for corporate shares. Over-the-Counter Options Archived 2010-05-10 at archive.today. About.com.
References
- Etzel, Barbara (Aug 29, 2003). Webster's New World Finance and Investment Dictionary. Wiley. ISBN 978-0764526350.
- "FAZ.NET Börsenlexikon". Frankfurter Allgemeine Zeitung (in German).
- "Commodity exchange". Encyclopaedia Britannica.
External links
- . Collier's New Encyclopedia. 1921.
An exchange bourse b ʊer s trading exchange or trading venue is an organized market where especially tradable securities commodities foreign exchange futures and options contracts are bought and sold HistoryThe Huis ter Beurze center in Bruges BelgiumCoat of arms of the van der Beurze family which depicts three purses Flemish buerzen Greek birsa Latin bursa and thereby gave both the family its name and gave rise to the word bourse 12th century Brokers on the Grand Bridge France In the twelfth century foreign exchange dealers in France were responsible for controlling and regulating the debts of agricultural communities on behalf of banks These were actually the first brokers They met on the Grand Bridge in Paris the current Pont au Change It takes its name from the forex brokers citation needed 13th century Huis ter Beurze Belgium The term bourse is related to the 13th century inn named Huis ter Beurze owned by nl family in Bruges Belgium where traders and foreign merchants from across Europe especially the Italian Republics of Genoa Florence and Venice conducted business in the late medieval period The building which was established by Robert van der Beurze as a hostelry had operated from 1285 Its managers became famous for offering judicious financial advice to the traders and merchants who frequented the building This service became known as the Beurze Purse which is the basis of bourse meaning an organized place of exchange Eventually the building became solely a place for trading in commodities During the 18th century the facade of the Huis ter Beurze was rebuilt with a wide frontage of pilasters However in 1947 it was restored to its original medieval appearance citation needed 13th century 17th century Italian city states Belgium and the Netherlands In the thirteenth century the Lombard bankers were the first to share state claims in Pisa Genoa and Florence In 1409 the phenomenon was institutionalized by the creation of the Exchange Bruges It was quickly followed by others in Flanders and neighboring countries Ghent and Amsterdam It is still in Belgium and the first building designed to house a scholarship was built in Antwerp The first scholarship organized in France was born in Lyon in 1540 citation needed The first documented crash took place in 1636 in Holland The prices of tulip bulbs reaching excessively high levels known as the Tulip mania The price collapsed on October 1 In the seventeenth century the Dutch were the first to use the stock market to finance companies The first company to issue stocks and bonds was the Dutch East India Company introduced in 1602 17th century England and France Decorative sculpture of a purse Spanish bolsa on the Palace of la Bolsa de Madrid early 1890s The London Stock Exchange started operating and listing shares and bonds in 1688 The Paris Stock Exchange was founded in 1724 In 1774 the courts required that it be shouted clarification needed to improve the transparency of operations citation needed Contemporary history Interior hall of the Helsinki Stock Exchange in Helsinki Finland 1965 In the nineteenth century the industrial revolution enabled rapid development of stock markets driven by the significant capital requirements for the finance industry and transport Since the computer revolution of the 1970s there has been a dematerialization of securities traded on the stock exchange citation needed In 1971 Nasdaq became the world s first electronic stock market In France the dematerialization was effective from November 5 1984 citation needed The development of information technology during the late part of the 20th century led to a new type of electronic exchange that replaced the more traditional physical markets This led to new definitions in financial regulations that recognized these new exchanges such as the multilateral trading facility in Europe and alternative trading system in the United States Regulators also started using the term trading venue to describe the wider definition which encompasses both traditional exchanges and electronic exchanges DescriptionExchanges bring together brokers and dealers who buy and sell these objects These various financial instruments can typically be sold either through the exchange typically with the benefit of a clearing house to reduce settlement risk Exchanges can be subdivided By objects sold Stock exchange or securities exchange Commodities exchange Foreign exchange market is rare today in the form of a specialized institution By type of trade Classical exchange for spot trades Futures exchange or futures and options exchange for derivatives In practice futures exchanges are usually commodity exchanges i e all derivatives including financial derivatives are usually traded at commodity exchanges This has historical reasons the first exchanges were stock exchanges In the 19th century exchanges were opened to trade forward contracts on commodities Exchange traded forward contracts are called futures contracts These commodity exchanges later started offering future contracts on other products such as interest rates and shares as well as options contracts now they are generally known as futures exchanges For details see Stock exchange securities exchange List of stock exchanges Category Stock exchanges Commodity exchange futures exchange List of futures exchanges Category Futures exchanges Foreign exchange marketSee alsoCommodity market Private electronic market Stock market List of stock exchanges Over the counter finance economy portalNotes and citationsNotesThe term bourse is derived from Ancient Greek byrsa romanized bursa lit the skin stripped off a hide which was later used as bursa in Medieval Latin to refer to the purse Citations Word of the Day Bursa You Can Invest in This Word Haaretz Bourse Online Etymology Dictionary The stock market from the Ter Beurse inn to Wall Street nbbmuseum be Archived from the original on 2019 08 12 Retrieved 2018 04 09 Kindleberger Charles P and Aliber Robert 2005 Manias Panics and Crashes A History of Financial Crises New York p 16 ISBN 0 465 04380 1 a href wiki Template Cite book title Template Cite book cite book a CS1 maint location missing publisher link CS1 maint multiple names authors list link Crump Thomas 1 March 2006 The Dutch East Indies Company The First 100 Years Transcript Gresham College Gresham ac uk Retrieved 21 August 2017 Ban Zoltan 2011 12 30 Sustainable Trade Changing the Environment the Market Operates In Through Standardized Global Trade Tariffs Author House ISBN 978 1 4685 0594 8 White Eugene N 2003 Rosenthal Jean Laurent Sokoloff Kenneth L Hoffman Philip T Engerman Stanley L eds The Paris Bourse 1724 1814 Experiments in Microstructure Finance Intermediaries and Economic Development Cambridge Cambridge University Press pp 34 74 doi 10 1017 cbo9780511510892 004 ISBN 978 0 521 82054 7 retrieved 2022 10 28 A History of Trading WSJ May 23 2017 Retrieved May 3 2024 Stock Exchanges are the most publicly recognized places for buying and selling shares They are easily the single most important component of the secondary market for corporate shares Over the Counter Options Archived 2010 05 10 at archive today About com ReferencesEtzel Barbara Aug 29 2003 Webster s New World Finance and Investment Dictionary Wiley ISBN 978 0764526350 FAZ NET Borsenlexikon Frankfurter Allgemeine Zeitung in German Commodity exchange Encyclopaedia Britannica External links Bourse Collier s New Encyclopedia 1921
