Chapter 1: History of the emergence of stock exchanges

Studying the stock market, like any other field of knowledge, we will start with a description of the basic terms and concepts. It is time to get used to a series of new definitions, which will be an aid in learning the rules of the securities market.

To begin with, let’s make a small excursion to the past. One day, a Belgian merchant Van der Bursay came to Italy to establish a profitable business there. In time he earned the respect of other merchants and bankers, and they began to hold meetings in the square in front of his house, and sometimes at his house. From the surname of this merchant ( Burse ) the word “stock exchange” was derived. But this “friendly” exchange did not last long. Very quickly it grew into a separate organization called the Antwerp Stock Exchange, and its building was decorated with the inscription: “For the benefit of merchants of all languages and nations. From this moment the history of stock exchanges begins. The Antwerp Stock Exchange functioned to facilitate transactions, familiarize visiting merchants with the range of goods and simplify negotiations. Its favorable location, the great connections of its members and the rules according to which all trade relations were equal, quickly gained it worldwide popularity.

Continuing to familiarize ourselves with the history of the emergence of stock exchanges, it should be noted that the word “stock exchange” can have several different definitions, viz:

a set of transactions concluded at that place (in the phrase: “tomorrow’s stock exchange will be quiet”);
a set of traders who regularly appear in one place to trade with each other (“a crowded exchange”);
a certain place where traders gather (“the Petersburg exchange on the avenue”).
Nowadays, the last two definitions are associated with the exchange, in which the exchange is understood either as a place where trade takes place, or as meetings of traders themselves, where deals are established and mutual trading relations are formed. In short, the stock exchange facilitates the contact between supply and demand, much like bazaars and fairs. The similarity between a fair and an exchange can be seen in the example of wholesale trade. There are only three differences between them:

A fair is a large bazaar where you can find a variety of goods of different quality and quality;
a fair is a large bazaar where a variety of goods of varying quality can be found. And in a commodity or stock exchange, there is no commodity as such. It is stored in warehouses and only its characteristics appear on the exchange;
a fair brings supply and demand together from time to time, while a stock exchange brings them into constant contact.