An exchange, bourse, trading exchange or trading venue is an organized market where people can buy and sell financial instruments, such as tradable securities, commodities, foreign exchange and derivative contracts.
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.
13th century: Huis ter Beurze, Belgium
The term bourse is related to the 13th-century inn named "Huis ter Beurze" owned by Van der Beurze 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.[2] The building, which was established by Robert van der Beurze as a hostelry, had operated from 1285.[3] Its managers became famous for offering judicious financial advice to the traders and merchants who frequented the building.
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:
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:
- By objects sold:
- Stock exchange or securities exchange[10]
See also
- Commodity market
- Private electronic market
- Stock market
- List of stock exchanges
- Over-the-counter (finance)
Notes and citations
- Notes
- Citations
External links
References
- 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, retrieved 9 April 2018^