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Lesson 7. The Markets > Over the Counter - Pg. 37

The Markets 37 Again, many of these exchanges trade the same stocks as their bigger counterparts to help reduce the load that the major exchanges are expected to service. At the end of the day, the results of trading a particular stock are added up from all locations and reported to the general public as composite trading. Think of the situation as a burger joint. The entire country couldn't walk into the same burger joint and expect to be served within a reasonable time frame. So, the burger joint opens up locations all over the country, and they all offer the same food to their customers. In the same way, the regional exchanges offer the same stocks for trade to local investors as the big ones do. At the end of the day, however, management wants to know how many burgers were sold at all locations. After adding together the sales at all locations, the resulting total number of burgers sold is known as the burger joint's composite trading figure. Small Fry Regional Exchanges Regional exchanges conduct their own proprietary business as well business for their bigger coun- terparts. The requirements for a company to have its stock listed on the two major exchanges are often prohibitive for many smaller companies. However, these companies can usually meet the requirements of the smaller exchanges and for that reason are traded there. For example, in the same burger joint scenario let's say you are a lobster fisherman. You know that the national burger joint has no interest in your new product, the Lobster Burger. In Maine, however, the Lobster Burger is a big hit. Rather than attempting to sell your Lobster Burger to Burger Joint headquarters for distribution in all its locations, you take your Lobster Burger idea directly to Burger Joint headquarters for the State of Maine. They agree to distribute, or sell, your Lobster Burger exclusively through Maine. In the same way, a regional exchange offers access to markets where many smaller companies can remain competitive.