An overview of the exchanges

In such troubled economic times everyone needs to take a step back and stop panicking. We need to take stock of our situation and calmly consider our options. It can be difficult to remain calm while the market is going up and down so quickly. However, we need to know that if we panic we will probably loose everything. The great depression was the result of many, many runs on banks. People panicked and took all of their money out of the bank at once, thereby destroying all of the banks. We are in a very different situation today because banks are insured. You have probably heard about all of the problems on the stock market. People are loosing thousands of dollars everyday. The market goes up and down extremely quickly. If you can become educated about the stock markets you might be able to save some money or to make some. You need to know that a little about the stock market and about how it functions. We are all so panicked but we don't really know much about the economy. This is the really dangerous situation because if you don't know what you are doing you could actually make the situation much, much worse. The place to start is with the stock market itself. Another word for the market that you might have heard is the stock exchange. So what exactly is an exchange?

An exchange isn't just a transfering of goods. An economic exchange is some sort of group, institution, or organization that provides a place for stocks, bonds, options, commodities, futures, and just about anything you can imagine to be sold. The exchange sets definite hours everyday and durring this hours allows buyers and sellers to work together and trade. Naturally the different exchanges have different regulations and requirements for the companies that trade on them. You can't just trade on the New York Stock Exchange (NYSE) or the Dow Jones Industrial unless you can meet certain basic criteria. These rules could include all sorts of different regulations and expectations. When a company works with a particular exchange we say that they are `listed' on that particular exchange.

The regulations set by the stock exchanges are usually there to limit the liability of those who trade on them. The rules can help to stabilize the market in a way that would otherwise be impossible. If a company does not trade on a stock exchange then they are said to work OTC (over the counter). Most businesses that sell OTC are much smaller than the ones who trade over the major exchanges.

If you are thinking about investing today you need to be very careful. The stock exchanges are going all over the place. You should probably only invest if you can hold onto the investment for the long term. A short term investment in a bear market will probably only loose large amounts of money. If you can wait on the investment until the market swings back up you can make some money. In fact, some investors actually like to invest when the market goes down so that they can buy low and sell high. Many people make lots of money this way, but they know what they are doing and they have the money to spare. Before you do this you should definitely consult a financial expert. With the market the way it is today it is definitely too unpredictable to just invest without some advice. Be ready to loose what you might invest. Learning more about the exchanges will definitely improve you investment chances.