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The Paris Stock Exchange is the informal name for France's main securities exchange. It was historically known as Paris Bourse. In 2000, it was renamed Euronext Paris as part of an alliance agreement with exchanges in three other countries.
The first single and permanent Paris stock exchange was established in the early 19th century. Before this time, stocks were traded in several physical locations in the city. Traders eventually settled in a single location, the Palais Brongniart. As "Bourse" is a French word that can be translated into several English finance-related terms, including stock exchange, the building also became known as Palais de la Bourse, with the exchange itself referred to as Paris Bourse.
In 2000, the Paris stock exchange agreed a form of merger with the national stock exchanges of Belgium, Spain and the Netherlands. The resulting alliance is known as Euronext, with the French exchange now known as Euronext Paris. Taken as a whole, the Euronext exchange is larger than any other in Europe, bar the London Stock Exchange in the United Kingdom. In 2007, Euronext formed an alliance with the New York Stock Exchange to form NYSE Euronext, a move inspired by rumors that another major American exchange, NASDAQ, was going to buy out the London Stock Exchange.
There are four sections to the Paris Stock Exchange. The Premier Marche, which translates as first market but is generally referred to as the official list, is made up of the largest publicly traded companies. Medium-sized companies come under the Second Marche. The Nouveau Marche covers new companies that are quickly expanding and need to access capital to fund this expansion. Any other securities come under the Marche Libre, or Free Market; these trades are not regulated, and Euronext Paris only acts in an administrative role here.
The Paris Stock Exchange was one of the earliest nation exchanges to switch to an electronic trading system. Until 1986, it used open outcry, in which traders make deals in person via verbal communication and hand gestures. At this point, the exchange began installing the Computer Assisted Trading System, having purchased the technology originally used in the Toronto market. The main benefit is that traders now have complete access to market data and can make more informed decisions. The main drawback is that traders cannot read body language or facial expressions that might inform them as to how strong or weak another trader's bargaining position truly is.