The Madrid Stock Exchange is Spain’s largest stock and bond trading market, with a long and colorful history dating back over 200 years. After several failed attempts, it was permanently established in 1831 and has since seen many fluctuations due to historical events. The exchange now uses a fully electronic system and bases its trading on the Madrid Stock Exchange Index, which tracks several domestic and international sectors important to Spain.
The Madrid Stock Exchange, also known as the Bolsa de Madrid, is the largest stock and bond trading market in Spain. This stock market has one of the longest and most colorful histories of any European market. The current incarnation of the market uses a fully electronic system and works with a large index representing billions of euros of trading.
The history of this exchange dates back more than 200 years, making it one of the oldest in the world. However, the first foundation of a stock exchange in Madrid was not a success. In an effort to mimic the financial advantage of the Brugge and Amsterdam stock markets, Spaniard Jose Bonaparte opened a stock exchange in a monastery and church in Madrid in 1809. The city, however, was not a major trading center at the time, and the the new market immediately went out of business. It would be more than 20 years before the Madrid Stock Exchange was permanently established.
Opening its doors in 1831, thanks to the adoption of a law that established a national market, the Madrid Stock Exchange was born. Over the next 100 years the market saw many fluctuations due to the Spanish government losing control of countries such as Puerto Rico, World War I and the Great Depression. The biggest change occurred from 1936 to 1940, when the market closed due to the Spanish Civil War. After the end of World War II, the market enjoyed stability and prosperity, joining the European Union and thus starting to trade all of its Euro-based securities.
Dedication to the most modern technology available is the cornerstone of the modern Madrid Stock Exchange. From the exchange’s inception until the 1990s, all trading and dealings were done on the exchange floor and handled verbally. In 1993, a fully electronic system was adopted which allowed for more efficient operations and better record keeping.
The Madrid market bases its trading on the Madrid Stock Exchange Index, a directory used to measure the performance of selected stocks. The index tracks several domestic and international sectors important to Spain, including construction, financial companies, energy companies, consumer staples and more. The IBEX 35 is a concentrated form of the Index, shortened to the top 35 most liquid stocks traded on the Madrid market and is comparable to the US NASDAQ Index.
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