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What is the Stock Market? The Australian Stock Exchange
So what is the stock market and what are shares? The stock market is where the buying and selling
of company shares takes place. In Australia, these transactions take place through the
Australian Stock Exchange, or ASX as it is known. It was formed in 1987 by amalgamating
the six capital city stock exchanges. The amalgamation was necessary because of financial
deregulation and the accompanying increase in international transactions.
Before 1987, most of the action took place on the floor of the stock exchanges. Transactions
were shouted, prices were chalked up on a board, in fact, to most of us, it seemed as
if there was little order to the goings-on. However, the ASX introduced the Stock Exchange
Automated Trading System (SEATS), which by 1990 had taken over all transactions. SEATS
allows trading to be conducted through a computer system. Transactions are processed in the
order in which they are made and the system links buyers and sellers. It may not match
the drama of the past but it is far more efficient.