Exchange (organized market)
An exchange (or bourse) is a highly organized market where (especially) tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought.
The name "bourse" is derived from the 13th-century inn named Ter Beurze in Bruges, Belgium where traders and foreign merchants from across Europe conducted business in the late medieval period. The building, which was established by Robert van der Buerze as a hostelry, had operated from 1285. Its managers became famous for offering judicious financial advice to the traders and merchants who frequented the building. This service became known as the "Beurze Purse" which is the basis of the word bourse, meaning an organised place of exchange. Eventually the building became solely a place for trading in commodities.
During the 18th century, the façade of the Ter Beurze was rebuilt with a wide frontage of pilasters. However, in 1947 it was restored to its original medieval appearance.
Exchanges bring together brokers and dealers who buy and sell these objects. These various financial instruments can typically be sold either through the exchange, typically with the benefit of a clearinghouse to cover defaults, or over-the-counter (OTC), where there is typically less protection against counterparty risk from clearinghouses although OTC clearinghouses have become more common over the years, with regulators placing pressure on the OTC markets to clear and display trades openly.
Exchanges can be subdivided:
- by objects sold:
- by type of trade:
In practice, futures exchanges are usually commodity exchanges, i.e. all derivatives, including financial derivatives, are usually traded at commodity exchanges. This has historical reasons: the first exchanges were stock exchanges. In the 19th century, exchanges were opened to trade forward contracts on commodities. Exchange-traded forward contracts are called futures contracts. These commodity exchanges later started offering future contracts on other products, such as interest rates and shares, as well as options contracts. They are now generally known as futures exchanges.
For details see:
- stock exchange (securities exchange), List of stock exchanges, Category:Stock exchanges
- commodity exchange (futures exchange), List of futures exchanges, Category:Futures exchanges
- foreign exchange market
See also 
- Stock Exchanges are the most publicly recognized places for buying and selling shares. They are easily the single most important component of the secondary market for corporate shares. Over-the-Counter Options. About.com.
- OTC Clearing 'FIX'ed Up. FIXGlobal.
- A Focus on OTC Clearing Innovation. IntercontinentalExchange.
- Webster's New World Finance and Investment Dictionary