Are the buying and selling of stocks centralized activities? Why or why not?

Are the buying and selling of stocks centralized activities? Why or why not?

A. Yes, the New York Stock Exchange is the principal exchange for the nations of the world.

B. No, people can buy stocks anywhere, and they do not need to go through a market.

C. Yes, the world’s stock markets are coordinated exchanges, and they are dependent on one another.

D. No, there are many stock markets around the world, and they are independent of one another.

Answer: D. No, there are many stock markets around the world, and they are independent of one another.

Trading in stocks cannot be considered a concentrated process, as there are stock markets all over the world, and none of them is subordinated to others. Though one may affect the other, both are distinct by their policies, stocks, and working hours. For example, the New York Stock Exchange (NYSE) and NASDAQ are key stock exchanges situated in the United States; nevertheless, they are not affiliated with each other or any other world stock exchanges such as the London Stock Exchange, Tokyo Stock Exchange, or the Shanghai Stock Exchange.

Every exchange is unique in terms of the listed companies, the mode of trading, and the existing regulations. For instance, a company may actively deal with the NYSE but is not necessarily a member of the TSE or the other way around. Moreover, since the start of electronic trading, the majority of stocks can be purchased over the counter (OTC) or with the help of other trading systems increasing its decentralization. This is apparent in the fact that the exchanges are run independently; when the NYSE closed for business, trading may be going on in some Asian countries. Although F/X markets are inextricably related to global economic events that can impact the different exchange markets at once, the exchange markets are different. It increases market efficiency since there are severally ways through which firms can bring their shares for sale in the market, and at the same time enables investors to access several global investment instruments. However, it also means that investments and corporations are in a rather interdependent but not centrally controlled global financial environment.