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Is there a limit for stock market ? For example: New York stock exchange volume was 20 trillions in 2011
Can New York stock exchange volume increase infinite ?

That's an interesting question.  Let's break it down into its component pieces to take a better look at it.

A stock exchange is a place for buyers and sellers of stock to exchange with each other; they are an intermediary that facilitates these transactions.  They do this in 2 ways.
1)Electronic transfers done via computer.  These compose the vast majority of transactions now.
2)Manual transfers done by individuals who physically interact and communicate together in order to negotiate price and quantity.  Think of the stereotype of people shouting on the trading floor.  These types of transactions still exist, but not to the extent that they used to.  In fact, stock exchanges now have computer terminals on the trading floor so that electronic transfers can be done "in the pit".

So, in order to understand the limitations of a stock exchange, you have to look at the limitations of their component pieces.  Since there is no limit on the number of shares that can be exchanged in a given transaction, you could use the following steps to find the theoretical limits of a stock exchange.
1) Determine the number of transactions the exchange's computers can handle at the same time
2) Find that number of companies which have the highest shares outstanding, and assume that each transaction exchanges ALL outstanding shares for a single company, and that all transactions are being made at the same time.  In other words, the entire stock value of a company is being exchanged in a single transaction, and this is happening for all the companies with the most shares outstanding to the point where even 1 additional transaction would crash their computer system.
3) Multiply that number by the time it takes to complete the transactions and make another one (50 milliseconds on the Hibernian cable, 65 milliseconds on the AC-1 cable, etc.)

Then once you've maxed-out their computer systems, you also need to account for the total number of physical traders that work at a given exchange, and assume each one is trading the full-volume of the next largest companies as measured by shares outstanding in each transaction, and calculate that by the maximum number of transactions each one can make if working as fast as possible under optimal conditions.

In other words, there is a theoretical limit.  I have no idea what that would be, because it's purely mathematical and would never be possible.  For our purposes, there is no limit on volume.


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Michael Taillard


Accepts most economic questions


Consulting with major corporations, government agencies, political organizations, small businesses, non-profits, start-ups, and even individual people. Teaching at universities around the world, and developing original coursework. Performing original research and analysis. Writing books and scientific studies.

American Economics Association

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PhD (Financial Economics; honors) -- MBA (International Business Finance; honors) -- Grad School Certificate (International Business Management; honors) -- BS (International Business Economics; honors) -- AA (Business Administration; honors) -- Certificate (Chinese Language and Culture) -- Trade School (Transportation Logistics; honors)

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