The Largest Stock Exchanges by Market Cap

You’ve heard of a stock exchange, such as the New York Stock exchange, but what is it, how does it work and what are the largest stock exchanges by market cap in the world? 

Here’s everything you need to know about stock exchanges. 

What Is a Stock Exchange? 

A stock exchange, also known as a stock market, is a centralized marketplace where buyers and sellers come together to trade stocks, exchange-traded funds and other securities. It provides a platform for companies to raise capital by issuing shares of stock and for investors to buy and sell those shares. 

Here are key features and functions of a stock exchange: 

• Trading platform: A stock exchange serves as a trading platform where buyers and sellers can execute trades. It provides a regulated and organized marketplace with established rules and procedures for trading securities. 
• Listing and initial public offerings (IPOs): Companies can apply to list their shares on a stock exchange through a process known as listing. Once listed, their shares become publicly tradable. An IPO is when a company offers its shares to the public for the first time, typically through the stock exchange. 
• Price discovery: Stock exchanges facilitate price discovery by bringing together buyers and sellers to determine the market price of securities. The continuous buying and selling of shares on the exchange contribute to price formation, reflecting the supply and demand dynamics of the market. 
• Market regulation: Stock exchanges play a crucial role in regulating the market to ensure fair and transparent trading. They enforce listing requirements, monitor trading activities, and implement rules to maintain market integrity and protect investors. 
• Liquidity and market depth: Stock exchanges provide liquidity to the market by offering a platform where buyers and sellers can easily find counterparties to execute trades. Higher liquidity and market depth enable investors to enter or exit positions with minimal impact on the price of the security. 
• Market indices: Stock exchanges often calculate and maintain market indexes, such as the S&P 500, Nasdaq-100 or the Dow Jones Industrial Average, to track the performance of specific groups of stocks or the overall market. These indexes serve as benchmarks and indicators of market performance. 
• Clearing and settlement: Stock exchanges typically have mechanisms in place for clearing and settlement of trades. Clearing involves verifying and matching trade details, while settlement involves the transfer of ownership and funds between buyers and sellers. 
• Market surveillance: Stock exchanges monitor trading activities to detect and prevent fraudulent or manipulative practices. They employ surveillance systems and regulatory oversight to maintain the integrity and fairness of the market. 

Note: A stock exchange can be identified by its MIC, which stands for market identifier code. The MIC is a standardized three or four-letter code assigned to each market or exchange to facilitate efficient communication and routing of trading orders and transactions. 

Top 5 Largest Stock Exchanges in the World 

As of March 2023, the largest stock exchanges in the world by market cap are: 

1. New York Stock Exchange (NYSE) 
2. Nasdaq (XNAS) 
3. Shanghai Stock Exchange (SSE) 
4. Euronext 
5. Japan Exchange Group (JPX) 

New York Stock Exchange (NYSE) 

The New York Stock Exchange (NYSE) is the world's largest and best-known stock exchange. It is located on Wall Street in New York City, United States. The NYSE has a rich history dating back to 1792 when it was founded as a private organization known as the New York Stock & Exchange Board. 

Here are key details on NYSE: 

• Location: New York City, U.S. 
• Region: United States 
• Market cap: $25.15 trillion 
• MIC: XNYS 

Nasdaq 

The Nasdaq (National Association of Securities Dealers Automated Quotations) is an electronic stock exchange that was founded in 1971. It is one of the largest stock exchanges in the world, known for its technology-focused and growth-oriented companies. The Nasdaq is located in New York City, United States. 

Here are key details on the Nasdaq: 

• Location: New York City, U.S. 
• Region: United States 
• Market cap: $18.99 trillion 
• MIC: XNAS 

Shanghai Stock Exchange 

The Shanghai Stock Exchange (SSE) is one of the major stock exchanges in China and is located in Shanghai, the country's financial hub. It is one of the two primary stock exchanges in mainland China, along with the Shenzhen Stock Exchange. 

Here are key details on the Shanghai Stock Exchange: 

• Location: Shanghai, China 
• Region: China 
• Market cap: $7.24 trillion 
• MIC: XSHG 

Euronext 

Euronext is a pan-European stock exchange that operates multiple securities exchanges in different countries. It was created in 2000 through the merger of the stock exchanges of Amsterdam, Brussels and Paris. Since then, Euronext has expanded its operations and acquired additional exchanges to become one of the largest and most prominent stock exchange operators in Europe. 

Here are key details on Euronext: 

• Location: Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo, Paris 
• Region: Europe 
• Market cap: $6.72 trillion 
• MIC: XAMS, XBRU, XMSM, XLIS, XMIL, XOSL, XPAR 

Japan Exchange Group 

The Japan Exchange Group (JPX) is a financial exchange group that operates multiple securities exchanges in Japan. It was formed in 2013 through the merger of the Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE). The JPX serves as a comprehensive financial market infrastructure provider and is responsible for facilitating trading and clearing of various financial instruments in Japan. 

Here are key details on the Japan Exchange Group: 

• Location: Tokyo, Japan 
• Region: Japan 
• Market cap: $5.65 trillion 
• MIC: XJPX 

How Many Stock Exchanges Are There? 

There are 60 major global stock exchanges that vary in market capitalization and trading volume. The largest stock exchange in the world is the New York Stock Exchange. 

Bottom Line 

Stock exchanges exist to provide a critical infrastructure for securities trading, enabling companies to access capital and investors to participate in the ownership of publicly traded companies. Thus, stock exchanges enable investors to build wealth over time and present opportunities for a range of trading strategies while at the same time helping to raise capital for publicly held companies.