stock exchange, organized market for the trading of stocks and bonds (see bond; stock). Such markets were originally open to all, but at present only members of the owning association may buy and sell directly. Members, or stock brokers, buy and sell for themselves or for others, charging commissions for their services. A stock may be bought or sold only if it is listed on an exchange, and it may not be listed unless it meets certain requirements set by the exchange's board of governors. There are stock exchanges in all important financial centers of the world; the New York Stock Exchange (NYSE, in nearly continuous operation since 1792), which had a trading volume of $7.3 trillion in 1998, is the largest in the world. Tokyo, London, and Frankfurt also have major facilities, and Euronext, an inter-European exchange that merged with the NYSE in 2007 and combines facilities in Amsterdam, Brussels, Paris, and other cities, is also significant.

By providing a centralized, ready market for the exchange of securities, stock exchanges greatly facilitate the financing of business through flotation of stocks and bonds. However, speculation in stocks can sometimes accentuate the instability of an economy. The reality of the Great Depression was emphasized by the stock market crash in 1929. The interstate sale of securities and certain stock exchange practices in the United States are regulated by federal laws administered by the Securities and Exchange Commission. Today, a large percentage of stocks are traded through such over-the-counter organizations as Nasdaq (National Association of Securities Dealers Automatic Quotations) and its European equivalent, Nasdaq Europe (formerly Easdaq). Through these organizations, many securities not listed on a major stock exchange may be traded by dealers using computer and telecommunications technology; in 1994, Nasdaq, on which many computer and other high-technology stocks are traded, surpassed the NYSE in annual share volume. After the deregulation of the British securities market in 1986, the London Stock Exchange saw a decline in business due to a new computerized market similar to Nasdaq.

Computer-driven trade has significantly affected the stock exchange. Computer and telecommunications technology, besides opening a wide market in over the counter dealings, has also given rise to trading on an international level. Personal computers and modems allow trading to occur around the clock (after-hours NYSE and Nasdaq trading began in 1999), and the securities trading on one major stock exchange can now significantly affect the trading on others. Many contend that the traditional manner of trading will eventually become obsolete. Technology also now allows for "day trading," a high-risk business in which numerous computerized trades are made during a single day, with large gains (and large losses) possible. See also margin requirement.

stock, in botany, common name for any species of the genus Matthiola, for Malcomia maritima (Virginia stock), and for the wallflower, all belonging to the family Cruciferae (mustard family), and for a carnation of the family Caryophyllaceae (pink family). Most are herbs indigenous to the Mediterranean region and to S Africa. A few are widely cultivated, both in greenhouses and in gardens, for the fragrant blossoms—usually purplish in the wild but of various colors in horticultural types. The evening stock, or perfume plant (Matthiola bicornis), is night-blooming; the Brampton stock, or gillyflower (M. incana), has an early blooming variety (annua), known as ten-weeks-stock or cut-and-come-again, which is sometimes grown as a house plant. The name gillyflower is also used for the Virginia stock, the wallflower, and for the carnation of the pink family. Stock is classified in the division Magnoliophyta, class Magnoliopsida, order Capparales, family Cruciferae; and order Caryophyllales, family Caryophyllaceae.

stock, in finance, instrument certifying to shares in the ownership of a corporation. Bonds are similar evidences of shares in a loan to a corporation. Stock yields no dividends until claims of bondholders have been met. Preferred stock is entitled to dividends of a specified percentage per annum before common stock is entitled to any dividends; the common stock is then usually entitled to the rest of the profits. In case of liquidation of the company, holders of bonds and preferred stock take precedence over holders of common stock in the division of assets. Holders of common stock usually have voting rights in the management of the corporation; bondholders and, usually, holders of preferred stock have no voting rights. Since the value of common stock depends largely on its earnings, it is often issued with no par value. Public demand for securities and the need of corporations for ready capital have led to the development of stock exchanges in most of the major cities of the world (see stock exchange).

stock, in horticulture: see grafting.

joint stock company: see chartered companies.

Stock, Frederick (Friedrich Wilhelm August Stock), 1872-1942, German-American conductor and composer. He came to the United States in 1895 as a violist in the Chicago Orchestra and became (1899) assistant conductor. As permanent conductor from 1905 until his death, Stock was responsible for the many premieres of new works. His own compositions include songs, orchestral works, and chamber music.

National Association for Stock Car Auto Racing: see NASCAR.

Form of automobile racing. Popular in the U.S., it features cars that conform externally to standard U.S. commercial models and are raced usually on oval, paved tracks. The National Association for Stock Car Auto Racing (NASCAR), founded in 1947 in Daytona Beach, Fla., gave the sport its first formal organization. The Daytona 500 is the sport's premier race.

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Contractual agreement entitling the holder to buy or sell a share of stock at a designated price for a specified period of time, regardless of changes in its market price during that period. The various kinds of stock options include put and call options, which may be purchased in anticipation of changes in stock prices, as a means of speculation or hedging. A put gives its holder an option to sell, or put, shares to another party at a fixed price even if the market price declines. A call gives the holder an option to buy, or call for, shares at a fixed price even if the market price rises. U.S. corporations often issue stock options to executives as a form of compensation in addition to salary, on the theory that an option is an incentive to improve the company's business and thus raise the value of its stock; at times such options have been far more valuable than the salary itself.

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Economic event in the U.S. that precipitated the Great Depression. The U.S. stock market expanded rapidly in the late 1920s and reached a peak in August 1929, when prices began to decline while speculation increased. On October 18 the stock market began to fall precipitously. On the first day of real panic, October 24, known as “Black Thursday,” a record 12,894,650 shares were traded. Banks and investment companies bought large blocks of stock to stem the panic, but on October 29, “Black Tuesday,” 16 million shares were traded and prices collapsed. The crash began a 10-year economic slump that affected all the Western industrialized countries.

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or stock market or(in continental Europe) Bourse

Organized market for the sale and purchase of securities (see security) such as stocks and bonds. Trading is done in various ways: it may occur on a continuous auction basis, it may involve brokers buying from and selling to dealers in certain types of stock, or it may be conducted through specialists in a particular stock. Some stock exchanges, such as the New York Stock Exchange (NYSE), sell seats (the right to trade) to a limited number of members who must meet eligibility requirements. Stocks must likewise meet and maintain certain requirements or risk being delisted. Stock exchanges differ from country to country in eligibility requirements and in the degree to which the government participates in their management. The London Stock Exchange, for example, is an independent institution, free from government regulation. In Europe, members of the exchanges are often appointed by government officials and have semigovernmental status. In the U.S., stock exchanges are not directly run by the government but are regulated by law. Technological developments have greatly influenced the nature of trading. In a traditional full-service brokerage, a customer placed an order with a broker or member of a stock exchange, who in turn passed it on to a specialist on the floor of the exchange, who then concluded the transaction. By the 21st century, increased access to the Internet and the proliferation of electronic communications networks (ECNs) altered the investment world. Through e-trading, the customer enters an order directly on-line, and software automatically matches orders to achieve the best price available without the intervention of specialists or market makers. In effect, the ECN is a stock exchange for off-the-floor trading.

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Individual share of earnings distributed among stockholders of a corporation or company in proportion to their holdings. Usually paid in cash, dividends may also be distributed in the form of additional shares of stock. Preferred stockholders receive a preferential dividend, usually at a fixed rate; common stockholders get a portion of what remains after payment of the dividends on preferred stock.

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In finance, the subscribed capital of a corporation or limited-liability company, usually divided into shares and represented by transferable certificates. Many companies have only one class of stock, called common stock. Common stock, as a share of ownership in the company, enh1s the holder to an interest in the company's earnings and assets. It carries voting rights that enable the holder to participate in the running of the company (unless such rights are specifically withheld, as in special classes of nonvoting shares). Dividends paid on common stock are often unstable because they vary with earnings; they are also usually less than earnings, the difference being used by the management to expand the firm. To appeal to investors who want to be sure of receiving dividends regularly, some companies issue preferred stock, which has a prior claim to dividends paid by the company and, in most cases, to the company's assets in case of its dissolution. Preferred-stock dividends are usually set at a fixed annual rate that must be paid before dividends are distributed to common stockholders. Seealso security, stock exchange.

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