What Is a Stock Exchange?
What Is a Stock Exchange? Author: @nkit A stock exchange is a formal marketplace where buyers and sellers come together to trade financial securities such as stocks, bonds, and other instruments. In simple terms, it is the place — physical or electronic — where shares of companies are bought and sold. Stock exchanges are essential for healthy markets. They ensure fairness, transparency, liquidity, and safety for investors who want to buy or sell ownership in public companies. How a Stock Exchange Works A stock exchange brings together: Investors who want to buy shares Investors who want to sell shares Brokers who act as intermediaries Systems that match buy and sell orders When you place an order to buy a stock, the exchange finds a seller at the same price. The exchange keeps records of trades and ensures that they happen quickly and correctly. Today, most stock exchanges operate electronically with advanced computer systems th...