I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple
Yes, common stock trades on many exchanges around the world. If you would like to get an idea of how many exchanges, you can use Bloomberg's BSYM data to see the individual tickers:
Search for "AAPL" and type in "Common" into the "Security Type" column filter. A list of exchange code mappings ("Pricing Source" column) to their names can be found in this spreadsheet:
Yup, different types of financial products trade differently.
Stocks and bonds are "fungible" meaning that they can be traded on any exchange that will let them, or even via private agreement which is called Over The Counter (OTC).
Futures are not fungible, so contracts that are traded have to be traded on the same exchange where you got them. The main reason for this is that each futures has a contract specification that would need to be the same across exchanges to be fungible: e.g. one contract of light-sweet crude oil is X U.S. gallons of oil at Y quality... The other reason for this is that once the contract has been traded the exchange (or your broker) assumes the counterparty risk if you or your counterpart default on the contract -- so keeping it all on a single exchange helps everyone keep track who sold what to who.
Currencies are the worst: there is no central market. It's all inter-bank agreements and probably the lightest regulated of the bunch. Retail customers get hosed because it's absolutely legal for your broker to front-run your order and skim a couple pennies off your trade.
fungible means that one item is the same as another. that they can be traded across different exchanges because of that fungibility is not necessarily a property of fungibility.
Yup, there's usually a primary exchange, but a stock can be traded on many exchanges. Years ago people could make money via arbitrage between exchanges. Essentially if stock ABC costed $50 at one exchange, but people were willing to buy ABC at $55 on another exchange, a quick trader could buy the stock at $50 on one exchange, and sell the equivalent on the other exchange for $55, making a "free" $5 without any change in their holdings. Now that we have computerized trading solutions the price difference between exchanges is essentially nil and cannot be taken advantage of unless you have ultrafast computers and access to fiber optic networks.
Typically a company's stock has a primary listing on one exchange, but may trade secondary instruments on another exchange, usually in another country, in order to appeal to that country's investors. I'm not too knowledgeable about the details, but I believe the secondary listings are structured as a sort of indirect way of owning the equivalent of the primary listing. For companies with a primary listing on a non-U.S. stock exchange, for example, they may have a secondary listing on a U.S. stock exchange by wrapping their equity in an instrument called an American depositary receipt (http://en.wikipedia.org/wiki/American_depositary_receipt).
I infer from the articles that shares from a given company can be traded on multiple stock exchanges. Can someone knowledgeable confirm that this is right? In that case, why is the symbol for Apple "NASDAQ:AAPL" on Google Finance? http://www.google.com/finance?q=apple