The Toronto Stock Exchange is a center for trading stocks based in the city of Toronto, Canada. It is the largest stock exchange in Canada with more than $1 trillion US Dollars' (USD) worth of stocks traded annually. The exchange is currently run as a for-profit corporation and is strong in mining, oil and gas stocks. It is also a center for domestic banking firms that operate across Canada. The Toronto Stock Exchange uses the Canadian Dollar for its listings and has been trading electronically since 1997, when it officially closed its floor space.
A stock exchange is a center for investors to trade stocks with each other. When companies “go public,” they allow individual investors to buy up stocks in the company. Having stock in a company is a form of ownership of that company. The value of a stock is a reflection of the value of a company, which tends to fluctuate with the ebb and flow of the market. Stock exchanges used to be physical floor spaces for traders to negotiate with each other, but the Internet is increasingly replacing the floor with electronic transactions.
The Toronto Stock Exchange was officially created in 1861 after a resolution was passed. In 1878, the Canadian state of Ontario incorporated the exchange, which granted it a particular legal status. The exchange was closed for three months in 1914 to prevent the public from descending into financial panic. During the Great Depression, the exchange merged with the Standard Stock and Mining Exchange, its key competitor. In 1997, it discontinued trading in a physical space inside the building—from this point on, all stocks on the Toronto Stock Exchange were traded electronically.
Companies in the mining, oil and gas sectors are particularly well-represented on the Toronto Stock Exchange. In fact, the exchange leads other stock exchanges in the world in this area. Another strong point of the exchange is Canadian banking. Canada’s five largest commercial banks are based at the exchange, including the Bank of Montreal and other banks that operate in different Canadian states.
The Toronto Stock Exchange lists a number of companies that are not based in Canada. By number of companies listed, it is the second largest exchange group in the world with about 4,000 companies. The better-known New York Stock Exchange has fewer listings, but a larger volume of money traded than the Toronto Stock Exchange.