Pacific Exchange (PCX)
What it is:
The Pacific Exchange (PCX) was a stock exchange based in San Francisco and Los Angeles.
How it works/Example:
Founded in 1882, the PCX used to be a trading floor in San Francisco. In 1957, it merged with the Los Angeles Oil Exchange. It used the open-outcry method of trading, which quickly became outdated when computerized trading rippled through the industry in the 1990s. It was acquired in 2000 by the Archipelago Exchange, which later merged with the New York Stock Exchange. Though the NYSE operates the PCX Plus options-trading platform, the Pacific Exchange has essentially ceased to exist.
Why it matters:
The New York Stock Exchange and the NASDAW haven't always been the only equity exchanges in the United States -- they're just a survivors. Stock exchanges are merely marketplaces, much like grocery stores or shopping malls, where investors can go to buy and sell goods. The prices that the exchanges charged for trading and the speed and accuracy at which one could trade on these regional exchanges were the basis of competitive advantage that wooed many companies to list their shares regionally.