A:

A stock can trade on any exchange on which it is listed. And to be listed it must meet all of the exchange's listing requirements and pay for any associated fees.

If it chooses to do so, a company can list its shares on more than one exchange, which is referred to as dual listing - although few companies do. However, there are some companies that are listed on both the NYSE and Nasdaq. Charles Schwab, Hewlett-Packard and Walgreens, for instance, all have dual listings on both exchanges.

One reason for listing on several exchanges is that it increases a stock's liquidity, allowing investors to choose from several different markets in which to buy or sell shares of the company. Along with the increased liquidity and choice, the bid-ask spread on the stock tends to decrease, which makes it easier for investors to buy and sell the security in the market at any time.

Multinational corporations also tend to list on more than one exchange. They will list their shares on both their domestic exchange and the major ones in other countries. For example, the multinational British Petroleum trades on the London Stock Exchange as well as the NYSE.

The increasing use and popularity of depositary receipts has helped raise the number of companies trading on exchanges in different countries. These investment products, which represent a company's stock deposited at a domestic bank, can be issued by that bank on a foreign exchange with or without the endorsement of the company being traded. Depositary receipts allow investors around the world to purchase and sell large international companies' stock.

(For further reading, see Getting to Know Stock Exchanges and What Are Depositary Receipts?.)

RELATED FAQS
  1. What are the advantages and disadvantages of listing on the Nasdaq versus other stock ...

    Discover some of the primary advantages and disadvantages that exist for companies listed on the Nasdaq exchange rather than ... Read Answer >>
  2. How does a company switch from one stock exchange to another?

    A publicly traded company can, in fact, switch to a stock exchange that it believes will be favorable to its financing efforts. ... Read Answer >>
  3. What are the rules behind the delisting of a stock?

    The criteria to remain listed on an exchange differs from one exchange to another. On the New York Stock Exchange (NYSE), ... Read Answer >>
  4. Why would a company choose to use global depositary receipts (GDRs) for financing?

    Learn why a company might choose to utilize global depositary receipts for financing, along with the many other benefits ... Read Answer >>
  5. Does a company's American depositary share equal one share of common stock?

    American depositary shares (ADS) come into play when a foreign company wants its shares to trade on a major American exchange. ... Read Answer >>
Related Articles
  1. Investing

    Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.
  2. Insights

    The NYSE and Nasdaq: How They Work

    Learn some of the important differences in the way these exchanges operate and the securities that trade on them.
  3. Insights

    Getting to Know the Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask.
  4. Investing

    Why Do Companies Choose NASDAQ for Their IPO?

    The NYSE is known for its prestige so why do some companies opt to list on the NASDAQ instead?
  5. Insights

    Learn About the New York Stock Exchange

    The New York Stock Exchange (NYSE) is nicknamed the “Big Board,” and for good reason. It’s the largest, oldest and best-known stock exchange in the world.
  6. Investing

    Getting Into International Investing

    Diversifying can mean not only investing in various asset classes but also venturing beyond domestic exchanges.
  7. Investing

    Explaining Fixed Exchange Rates

    A government using a fixed exchange rate has linked the value of its currency to the value of another country’s currency, or the price of gold.
  8. Personal Finance

    Travel Tips: Avoid Exchange Rate Headaches

    How to avoid the most common issues and hassles raised by exchange rates while traveling abroad.
RELATED TERMS
  1. Listed Security

    A financial instrument that is traded through an exchange, such ...
  2. Dual Listing

    When a company's securities are listed on more than one exchange ...
  3. Depositary Receipt

    A negotiable financial instrument issued by a bank to represent ...
  4. Regional Stock Exchange

    A place outside of a country's primary financial center where ...
  5. Chinese Depositary Receipt - CDR

    A type of depositary receipt that is traded on Chinese stock ...
  6. Primary Exchange

    The most important stock exchange in a given country. Common ...
Hot Definitions
  1. Nostro Account

    A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts ...
  2. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
  3. Drawdown

    The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted ...
  4. Inverse Transaction

    A transaction that can cancel out a forward contract that has the same value date.
  5. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  6. Solvency

    The ability of a company to meet its long-term financial obligations. Solvency is essential to staying in business, but a ...
Trading Center