When people usually think of stock trading, the first thing they often imagine is a crowded, loud trading floor on Wall Street. This is fair, as the New York Stock Exchange is currently the world’s largest stock exchange by overall market capitalization. Most of the megacorporations and multinational companies most of us can name are either directly listed on the NYSE, or enjoy the benefits of dual listings. 

The New York Stock Exchange is home to many household names and blue chip stocks from more traditional industries such as consumer goods, energy, transportation, construction, and many more. 

Notable listings - ExxonMobil (NYSE:XOM), General Electric (NYSE:GE), Bank of America (NYSE:BAC), IBM (NYSE:IBM), Pfizer (NYSE:PFE)

"I'm thinking about my priorities for this business.. I'd really classify that into three buckets.. to be focusing on technology.. ESG and continuing to add transparency around environmental social and governance.. I am incredibly focused on working with regulators, lawmakers, and market participants to ensure that this [!the!] remains the envy of the world" - Lynn Martin

Indices:

• The Dow Jones Industrial Average (DJIA) - a price-weighted index that tracks 30 of the largest companies listed on the NYSE
• The Standard & Poor’s 500 (S&P 500) - a capitalization-weighted index comprised of the 500 largest companies listed on the NYSE
• NYSE Composite - a capitalization-weighted index consisting of over 2000 securities listed on the NYSE

Remaining on US soil, the NASDAQ, or the “National Association of Securities Dealers Automated Quotations”, is the second-largest stock exchange in the US and the world. Founded in 1971 and located at Times Square in New York City, the exchange boasts more than 3500 listings and is the main hub and destination of companies from the global tech industry. 

Notable listings - Tesla Inc. (NASDAQ:TSLA), Amazon.com Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOGL)

"..the top five companies in the world are listed on NASDAQ today so we are the home to innovators, we're the home to the future, we're the home to those companies that really want to look at how they're going
to drive the economy forward" - Adena T. Friedman

Indices:

• NASDAQ 100 - a market capitalization-weighted index that tracks the largest NASDAQ listed companies (excluding the financial industry)
• NASDAQ Financial-100 - a market capitalization-weighted index that tracks the largest NASDAQ listed companies in the financial services industry
• NASDAQ Composite - a market capitalization-weighted index comprised of most NASDAQ listed companies

After China’s experimental implementation of free markets, investors have been piling in, to capitalize on the country’s steady economic growth. The Shanghai Stock Exchange, however, has largely seen an inflow of local investors, as most of the companies listed on the exchange only offer a small portion of their capital as free float, the stringent capital controls imposed by the government also has investors weary. Nonetheless, the exchange could take advantage of any changes in internal policy that may occur in China during the coming decades.

Notable listings - Kweichow Moutai Co. Ltd. (SSE:600519), Industrial and Commercial Bank of China Limited (SSE:601398), Agricultural Bank of China (SSE:601288), China Life Insurance Company Limited (SSE:601628), PetroChina Company Limited (SSE:601857)

Indices:

• SSE Composite - a market capitalization-weighted index that tracks all securities listed on the Shanghai stock exchange
• SSE 50 - a float-adjusted index tracking 50 of the largest companies tradable on the Shanghai Stock Exchange

A vast majority of Chinese companies, including members of the tech industry, trade their shares in Hong-Kong. Founded in 1891, in the Central District of Hong-Kong, the exchange has cemented itself as one of the drivers of the Asian financial markets. Alongside the Singapore Stock Exchange, SEHK has been a favorite among investors seeking to place their capital in the East. However, certain geopolitical factors, such as relations with China and the hot button topic of independence, have many investors worried as to what the future holds for the exchange.

Notable listings - Tencent Holdings Ltd. (SEHK:700), HSBC Holdings (SEHK:5), China Mobile Ltd. (SEHK:941), China Evergrande Group (SEHK:3333), Sands China Ltd. (SEHK:1928)

Indices:

• Hang Seng Index - a market capitalization-weighted index that tracks the 66 largest companies tradable on the Hong-Kong Stock Exchange

The Tokyo Stock Exchange is the premier hub of listed securities in Japan. Founded in 1878, it is the largest of five stock exchanges operating in the country of Japan.

Notable listings - Toyota Motor Corporation (TYO:7203), Sony Group Corporation (TYO:6758), Mitsubishi UFJ Financial Group (TYO:8306), Softbank Group Corp (TYO:9984), Nintendo (TYO:7974)

Indices:

• Nikkei 225 - a price-weighted index that tracks 225 of the largest publicly traded companies listed on the Tokyo stock exchange
• TOPIX - a market capitalization-weighted index that tracks over 1600 equities listed on the Tokyo stock exchange

The next European stock exchange that covers most of the European Union is Euronext. With headquarters in Paris and Amsterdam, Euronext offers equities from countries such as the Netherlands, France, Belgium, Portugal, Italy, etc. 

Notable listings - LVMH (Euronext Paris:MC), L'Oréal S.A (Euronext Paris:OR), Hermes International (Euronext Paris:RMS), Bank of Ireland Group (Euronext Dublin:BIRG), ING Group (Euronext Amsterdam:INGA.)

Indices:

• CAC 40 - a market capitalization-weighted index that tracks 40 of the 100 largest companies listed on the Euronext Paris exchange
• AEX - a market capitalization-weighted index that tracks the 25 largest companies listed on the Euronext Amsterdam exchange
• ISEQ 20 - a market capitalization-weighted index that tracks the 20 largest companies listed on the Euronext Dublin exchange
• PSI-20 - a market capitalization-weighted index that tracks the 20 largest companies listed on the Euronext Lisbon exchange
• BEL 20 - a market capitalization-weighted index that tracks the 20 largest companies listed on the Euronext Brussels exchange
• Euronext 100 - a market capitalization-weighted index that tracks the 100 largest companies listed across all Euronext exchanges and serves as a blue chip benchmark for Euronext

Another major stock exchange operating in mainland China is the Shenzhen Stock Exchange. Much like the exchange in Shanghai, SZSE offers a variety of state-controlled corporation stocks to the public.

Notable listings - BYD Company (SZSE:002594), Luzhou Laojiao (SZSE:000568), Bank of Ningbo (SZSE:002142), Vanke (SZSE:000002), Gree Electric Appliances (SZSE:000651)

Indices:

• SZSE 100 - a market capitalization-weighted index that tracks the 100 largest companies listed on the Shenzhen Stock Exchange
• SZSE Component - a market capitalization-weighted index that tracks 500 listed companies on the Shenzhen Stock Exchange 

For investors interested in the securities offered by companies in the UK, as well as a wide variety of multinationals and dual listings from countries such as Russia and the Nordic states, the London Stock Exchange, founded in 1801, is now the largest stock market in Europe, ahead of the likes of Euronext and the Frankfurt Stock Exchange.

Notable listings - Unilever plc (LSE:ULVR), Diageo (LSE:DGE), Shell plc (LSE:SHEL), AstraZeneca plc (LSE:AZN), Standard Chartered (LSE:STAN.)

Indices:

• FTSE 100 - a market capitalization-weighted index that tracks the 100 largest companies listed on the London Stock Exchange
• FTSE 250 - a market capitalization-weighted index that tracks the 250 largest companies listed on the London Stock Exchange that are not part of the FTSE 100
• FTSE All-Share - a market capitalization-weighted index that tracks around 600 companies listed on the London Stock Exchange and serves as an overall indicator of the market conditions on the exchange

A major North American stock exchange, and the largest in Canada, TSX was founded in 1861 and currently lists the largest number of mining and oil corporation stocks of any stock exchange in the world.

Notable listings - Royal Bank of Canada (TSX:RY), Suncor Energy (TSX:SU), Enbridge Inc. (TSX:ENB), Bank of Nova Scotia (TSX:BNS), Canadian National Railway (TSX:CNR)

Indices:

• S&P/TSX Composite - a market capitalization-weighted index that tracks the 250 largest companies listed on the Toronto Stock Exchange
• S&P/TSX 60 - a market capitalization-weighted index that tracks the 60 largest companies listed on the Toronto Stock Exchange across 10 industries

One of the oldest stock exchanges in the world, the Frankfurt Stock Exchange is the largest securities exchange in Germany. Founded in 1585, the exchange was initially set up to fix currency prices, but it was developed into a full-fledged stock exchange within the next few centuries. 

Notable listings - Adidas AG(FWB:ADS), Mercedes-Benz Group AG (FWB:MBG), Deutsche Bank AG (FWB:DBK), BMW AG (FWB:BMW), 

Indices:

• DAX - a market capitalization-weighted index that tracks the 40 largest blue chip stocks listed on the Frankfurt Stock Exchange
• EURO STOXX 50 - a free-float market capitalization-weighted index that tracks 50 Eurozone blue chip stocks listed on the Frankfurt Stock Exchange

Largest stock exchanges in North America

North America has two of the biggest stock exchanges in the world, alongside the Toronto Stock exchange. When deciding on which exchange you plan on trading, you have to decide what types of companies you want to invest in. For those who are looking for more traditional industries, The New York Stock Exchange should be the exchange of choice. If you are looking to invest in tech companies, NASDAQ will be the one offering the best selection of these stocks. While the Toronto Stock Exchange is comparably smaller than NYSE and NASDAQ, they have the most mining and oil corporations listed on their exchange.

The Largest stock exchanges in Europe

The European stock market is currently dominated by three exchanges, Euronext, London Stock Exchange, and Frankfurt Stock Exchange. Euronext is a combination of a few European exchanges and offers equities from countries like France, Belgium, the Netherlands, etc. If you are looking to invest in mostly European companies, then this should be your exchange of choice. Meanwhile, the London Stock Exchange is the largest stock exchange in Europe when it comes to securities listed. Here traders are expected to find stocks of the largest UK companies, alongside dual-listed companies from Russia, Nordic states, and other parts of the world. The smallest of the big three, the Frankfurt Stock Exchange, is the German stock exchange which was founded in 1585. Traders here are expected to find the most lucrative stocks of German companies, mainly dominated by the automotive industry.

The largest stock exchanges in Asia

When it comes to the Asian stock market there are four big players who control the majority of the market. Two of these exchanges originate in Chinese, namely the Shanghai Stock Exchange, and the Shenzhen Stock Exchange. These two stock exchanges don't have many differences as both of them are state-controlled exchanges where most of the listed companies only have a small portion of their share available for purchase and the rest is owned by the government. The only noticeable difference between these exchanges is that the Shanghai Stock Exchange mostly has old companies listed while in Shenzhen you will be able to find newer companies. The Hong Kong Stock Exchange (SEHK) is another Asian exchange with primarily Chinese companies listed. Most Chinese tech companies list their stock on the SEHK in order to reach the western market more easily. 

If you wish to invest in the growing Japanese economy then the Tokyo Stock Exchange is another Asian exchange that offers good listings of leading Japanese companies, such as Toyota, Sony, and Mitsubishi among many other big names.

Certain factors beyond the control of traders can greatly hinder the investing experience. Here are 10 key details to take into account when choosing the right markets to invest in:

1. Certain brokers have set limitations on which stock exchanges they have access to
2. Brokers who don’t have direct access to certain markets will do so using an intermediary platform, and based on the relevant jurisdiction, might take longer to deposit, withdraw and move funds through a clearinghouse
3. Each stock exchange has different working hours which makes it difficult for individual traders to manage trades on different exchanges from the same account
4. Stock exchanges use different currencies and exchange rates can eat into potential profits
5. Certain smaller markets are less active with lower trading volume and the number of available listings
6. Each stock exchange offers over-the-counter or OTC trades, which are typically of lower volume and used by institutional investors
7. Operating an exchange is a business in and of itself and operators being listed on the same exchange they oversee is a common occurrence
8. The fees charged by brokers will vary based on the stock exchange these fees apply to
9. Certain laws regarding the transfer of stocks and inheritance apply to long-term investors and traders are generally advised to seek the help of a tax professional or lawyer when dealing with these
10. The laws regarding financial transparency can vary from country to country

Much like any other asset class, stocks are subject to different types of regulation and are generally exposed to judicial changes in the country where the stock exchange they are listed on operates. 

Another major factor is the exposure to foreign currency risks. If a substantial portion of the portfolio is denominated in a different currency than the rest, the investor then has to consider certain micro and macroeconomic risks that could have a negative impact on their assets. 

For example, inflation figures and subsequent interest rate changes can have a dramatic impact on the overall profitability of their investment portfolio. 

However, where there are risks, there are rewards right around the corner. Diversifying beyond one’s home country and investing in a state with a more stable financial system can prove incredibly fruitful. That is why thousands of investors open accounts to trade US-listed equities, while their home country might not have a well-functioning exchange at all. 

Pros & Cons of Trading Different Markets

As each financial decision comes with its fair share of potential risk and reward, it would be beneficial to look at what diversifying into multiple foreign markets might entail for investors.

Pros

• Greater diversity of assets to choose from
• Opportunity to enter a more diversified and stable market
• The possibility to make decisions based on international relations between countries
• A variety of hedging strategies for wealth protection
• Certain tax incentives based on the country

Cons

• Exposure to foreign policy
• Currency exchange rate risk
• Transparency issues and the validity of financial statements
• Changes in the jurisdictional boundaries and additional regulation
• Limited access to market research and relevant data
• Adjusting to different trading platforms
• Reporting and additional tax liability
• Different working hours and holiday schedules

Learning the basics about your stock exchange of choice can save you a lot of confusion and help prepare you for the uncertainties faced when entering a new market. Consideration of certain factors such as currency rates, working hours, and the number of listed securities can give investors the necessary preparation to anticipate some factors affecting their trading portfolios. 

There are a lot of risks associated with entering a foreign market and investors should keep a lookout for any local regulatory changes, as well as the micro and macroeconomic climate affecting the country, and consequently, the exchange of choice.