The Top 10 Largest Stock Exchanges in the World. A large stock market ensures the liquidity of all the stocks in it and ensuring fair prices to the buyers without any discrimination. It’s often stated; the bigger the stock market, the better it gets. It’s absolutely right because a bigger stock market will have more liquidity, widely recognised by international companies, and it’ll offer better…. Well, you get the picture.
The most important thing about these large stock exchanges is the fact that they can only use the Nasdaq exchanges. So what does that mean? The US is not the only country with the largest stock exchanges. They are allowed to trade on the over the counter bulletin board – the OTCBB. Basically, trading is possible anywhere in the world on the Nasdaq.
Now, what about the other two? Well, the NYSE and NASDAQ allow trading on their respective exchanges only. NASDAQ is only available to Chinese and Russian companies. Whereas, the NYSE allows stocks listed in all countries. The OTCBB charges a lower membership fee, making it the easiest and cheapest way to trade.
It is, however, the world’s largest stock exchange. Let’s not forget the two other ones. They have their own unique qualities, such as the double-side market nature of trading. Where on the Nasdaq, two sides of the trade are always trading at the same prices (open outcry). Whereas on the OTC, a stock can be traded (double side) while another stock (open clam) is closed.
Based on my research, let me share my personal opinion. OTCs may have different market values than the Nasdaq. In terms of efficiency and liquidity, the Nasdaq is clearly a better option than the OTC. I would place the OTC at somewhere around fifth or sixth place overall, in terms of its market valuation. It’s only a matter of time until the other markets join the party.
Now, what about the New York Stock Exchange? My belief is that the NYSE is lagging behind the rest of the exchanges by quite a bit. First, they have a much larger market capitalization than the others, which gives them an advantage. They don’t have a true exchange, second. As a trader, I believe that the EFT is the best over-the-counter derivative.
Let me also mention a conversation I had in China with a Chinese acquaintance. He said that there was a rumor recently that the PBOC (People’s Bank of China) was looking at creating a digital currency like the EUR/USD or the CHY/GBP. These currencies could be traded online via Hong Kong mutual funds. The main argument I found against this was that if the Chinese government attempted such a thing, they might end up making it too accessible for everyone else to trade in, thus taking away from their trading power.
I believe that the NYSE and other New York Stock Exchange markets will continue to be the dominant players in global trading for many more years. They will be fine as long as they continue to provide great services for investors. They will not be the 10 largest stock exchanges in the entire world, but I don’t think so. But I do believe they are well on their way.