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

Dual-Listed Stocks

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 very few companies actually do. Companies such as Charles Schwab (SCHW) and Walgreens Boots Alliance (WBA) – formerly known as Walgreens – previously experimented with being dual-listed on the NYSE and NASDAQ, but have since returned to being listed only on a single exchange.

Key Takeaways

  • A stock can trade on any exchange where it is listed.
  • In order to be listed, a stock must meet all of the exchange's listing requirements and pay for all associated fees.

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 BP (BP) – formerly British Petroleum – trades on the London Stock Exchange, the NYSE and several other countries' exchanges.

Listing on Exchanges Through Depositary Receipts

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. An example of a well-known company with a heavily-traded depositary receipt trading on the NASDAQ is Chinese technology giant, Baidu (BIDU).