Chit Chat Stocks Stock Exchanges: The Best Businesses In The World? (4 Case Studies)
Mar 11, 2026
A lively dive into why stock exchanges can be some of the most durable businesses around. Short breakdowns of transaction fees, listing charges, market-data sales, and tech services. Four country case studies highlight London, Warsaw, Mexico, and the Philippines. Discussion of network effects, local monopolies, and what drives trading volume and listings.
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Four Pillars Of Exchange Revenue
- Stock exchanges earn revenue from four core pillars: transaction/execution fees, listing and corporate services, market data sales, and technology/connectivity services.
- These pillars amplify each other: more listings boost trading, which raises data value and demand for low-latency connectivity from HFTs.
Self Reinforcing Network Effects
- Exchanges form self-reinforcing network effects: more listings attract more traders, increasing liquidity and data value which in turn attracts more listings.
- That creates optionality to monetize via new products like analytics and connectivity.
Why Exchanges Have Wide Moats
- Strong exchanges combine network effects, branding, economies of scale, and switching costs, producing very high gross margins and durable moats.
- Intercontinental Exchange shows steady revenue growth and ~90% gross margins illustrating the economics.