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As I recently learnt, all U.S. stocks are part of either Tape A, Tape B or C. Stocks listed on the NYSE are on Tape A, NASDAQ-listed stocks are on Tape C and everything else is on Tape B.

Of course, if a stock is listed on some exchange, one can trade the stock there. However, many stocks are traded on multiple exchanges. In this case, how does one determine where the stock is listed? Is it based on the exchange where it first started trading? What if the stock is traded on multiple exchanges right after its IPO?

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Hi and welcome Myggen,

All stocks have to be listed on an exchange, but that does not mean that all trading in that stock has to be conducted via that exchange's order book. There are numerous "dark pools" of liquidity, often operated by investment bank trading departments that allow investors to trade stocks outside of the exchange. The pools simply tell the exchange what trades have been made; so the exchange can update its records about who owns what. But the trade need not happen on the NYSE or NASDAQ's trading platform itself.

Given this information, the NYSE and the NASDAQ can then provide reliable trading data on "their" stocks, even if the minority of actual trading was ever conducted through their own trading platforms.

The "listing" itself is more just (1) a register of legal ownership, and (2) a club membership that forces corporates to abide by basic standards and accepted rules of behaviour if it wants its stock to remain tradeable, given that it has gone public.

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A so-so analogy. Being listed on an exchange is like buying a new car from a dealer associated w the manufacturer, i.e. buying a new Chevy from a Chevy dealer. Trading on an exchange is like buying from a used car dealer, a lot more places to go, and they transact in pre-existing securities. "Used" securities that are already trading in the secondary market may also choose to be listed on an exchange. This is done to add credibility. Typically NYSE listed securities trade at a wee bit of a premium to those listed on other markets (based on studies of securities that have migrated their listing to Nasdaq from NYSE and vice-versa).

Unrelated but an exchange that accepts listings has minimum eligibility criteria, like for NYSE. An exchange that permits trading in securities listed elsewhere may have standards. Also, check out https://www.investor.gov/introduction-investing/investing-basics/glossary/listing-standards

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  • $\begingroup$ Thanks, although I still have some clarifying questions: Is a stock listing equivalent to a stock being traded on an exchange plus fulfilling the minimum standard for listing? Can a stock be listed on multiple exchanges? Does a stock have to be listed somewhere in order for it to be traded on an exchange? $\endgroup$ – Myggen-- Dec 21 '20 at 22:51
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    $\begingroup$ 1) Is a stock listing equivalent to a stock being traded on an exchange? NO, 2) fulfilling the minimum standard for listing? YES, 3) Can a stock be listed on multiple exchanges? YES, 4) Does a stock have to be listed somewhere in order for it to be traded on an exchange? YES. However, a stock does NOT need to be listed to be traded off an exchange - "over the counter"/OTC on bulletin boards and over the phone quotations - finra.org/filing-reporting/… $\endgroup$ – Bikenfly Dec 30 '20 at 11:30

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