What Is the Definition of a Stock Exchange?

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The stock exchange is a place where people trade securities, and this can be done between two people, two computers or 100 computers. Learn about the modernized stock trading system used in Shanghai with help from a portfolio manager in this free video on money management and personal finances.

Part of the Video Series: Investing & Money Management
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Video Transcript

The first time I time I was in China, I stood on a street corner in Won Jo, opposite the US Consulate there and watched people trade physical stocks, certificates. Hi, this is Roger Groh, with Groh Asset Management. That was the stock exchange. The stock exchange is just a place where people trade securities, nothing more fancy than that. Certainly Wall Street started that way and has now evolved along with most of the world in to a fully computerized operation where you have computers comparing and matching orders as opposed to individuals trading among themselves. It's interesting to note now that the Chinese, especially in Shanghai, their commerce hub, have created the most modern trading system in the world, modeled after the NASDAC. And in fact the picture of the head of the United States Securities and Exchange Commission is on the wall in their own exchange, because of the close ties that they feel exist there. But at any rate, an exchange is just a spot where they're bid and ask and you try and make a deal. It could be two people, it could be two computers, it could be a hundred computers. I'm Roger Groh with Groh Asset Management, thank you very much for spending time with me.

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