What it means
Everyone on the same exchange sees the same book and prices. One asset can trade on several exchanges, each with its own book. NYSE and Nasdaq list stocks, CME lists futures, and crypto exchanges list coins.
In practice
An exchange matches buyers with sellers and publishes every trade, so the price and volume you see are real transactions. That is why volume on stocks and futures is trusted more than volume on over-the-counter products.
Each exchange sets its own trading hours, tick sizes, fees and order types. A session open on a major exchange, such as 9:30 am in New York for US stocks, brings a burst of orders and volatility.
What to watch for
On crypto exchanges your coins and cash sit with the exchange itself, and exchanges have failed with customers' money on them before. Regulated stock and futures exchanges work differently: your account is held with a broker and trades are settled through a clearing house.
Related terms
4 terms- Order bookThe live list of every waiting buy and sell order, with the size at each price.
- BrokerThe company that gives you access to markets and sends your orders on for execution.
- OTCTrading directly between parties through dealers, with no single central exchange.
- NSE and BSEIndia's two main stock exchanges: the National Stock Exchange, home of the Nifty 50, and the Bombay Stock Exchange, home of the Sensex.