Financial innovation has introduced many new financial instruments whose pay-offs or values rely upon the prices of stocks. Some examples are exchange-traded funds , stock index and stock options, fairness swaps, single-stock futures, and stock index futures. These last two could also be traded on futures exchanges (that are distinct from stock exchanges—their historical past traces again to commodity futures exchanges), or traded over-the-counter. As all of those products are solely derived from stocks, they are generally considered to be traded in a derivatives market, somewhat than the stock market.
- Today, there are lots of stock exchanges within the U.S. and all through the world, many of which are linked collectively electronically.
- To facilitate this process, a company wants a market the place these shares could be offered.
- The stock change acts as a facilitator for this capital raising process and receives a charge for its services from the company