Over the Counter

In addition, the number of traders using NMS dwarfs the number of physical traders. While the crowds on the floors of the physical exchanges sometimes barely fit in the building, they represent only a small percentage of a fraction of the number of traders with access to NMS. NMS traders sit in offices all over the country, accessing NMS through computer terminals and conducting trades over the telephone.

"Wait a second," you wonder , "how could a trading network that large go undetected to the general public?" Well, in truth it hasn't. The members of the NMS network are governed by an association known as the National Association of Securities Dealers (NASD). The results of the day's trading over the NMS are reported to the general public as the National Association of Securities Dealers Automated Quotations, or NASDAQ. Ever seen that one in the newspapers?

Since NMS is so large in scope, attempting to report the entirety of even a single day's trading would create a document the size of the New York City phone book. NASDAQ therefore breaks down its listings by relevance, so investors (or anyone else) can search subdivided listings to learn the fate of their stock's performance. The Wall Street Journal, for example, includes these subdivisions:

• National Market Issues.  

  This listing reports on the activity of the most actively traded over-the-counter stocks. As a result, the information is usually the most widely reported and comprehensive in scope.

• NASDAQ Bid and Asked Quotations.  

  This listing usually covers the second most actively traded set of stocks. The information reported daily is less comprehensive in scope than National Market Issues and is a little less widely reported.

• Additional OTC Quotes.  

  Even though these are the least active of all the reported over-the-counter trades, they are still active enough to merit widespread reporting. Reported information is limited to the highest bid price of a stock and the lowest asking price of the stock for a single day's trading.

International Exchanges

The scope of American finance is absolutely unparalleled anywhere else on the globe. The American economy is somewhere around 16 times the size of its closest competitor. The sixth largest economy on the face of the earth, for example, is that of the State of California. For all its size, however, the U.S. economy does not, by any stretch of the imagination , stand alone. Exchanges and financial markets all over the world, through the use of today's computerized systems, have created a world where stocks trade 24 hours per day.

Exchanges exist in almost every major city in the world, including Paris, London, Frankfurt, Tokyo, Johannesburg, Sidney, Hong Kong, and Singapore. While every one of these exchanges directly affects, and is directly affected by, each other, they are all under the authority of their own governments and must follow their government's laws. As a result, they differ from each as much as they are the same. While learning about international markets is interesting, actually investing in them as an individual is an altogether different matter. As a general rule, most international investing is done by corporate entities such as banks or mutual funds which then provide opportunities for international investments domestically through the use of ADRs or globally invested funds.

CAUTION

Moving money and stock from country to country is a very difficult transaction as a result of conflicting tax structures, exchange rates, and permissible investments.