What is a Stock Exchange?
A stock exchange is a regulated marketplace where financial securities like stocks, bonds, and derivatives are bought and sold. It acts as an organized platform that connects buyers and sellers, ensuring fair, transparent, and efficient trading.
Companies that want to raise capital list their shares on a stock exchange through a process called an Initial Public Offering (IPO). Once listed, their shares become available for public trading. Investors can then buy or sell these shares based on supply and demand, price fluctuations, and market news.
Some of the world’s most well-known stock exchanges include:
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New York Stock Exchange (NYSE) – USA
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NASDAQ – USA
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London Stock Exchange (LSE) – UK
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Bombay Stock Exchange (BSE) – India
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National Stock Exchange (NSE) – India
Each exchange has its own set of rules and listing requirements. Stock exchanges play a crucial role in maintaining the integrity of financial markets by enforcing regulations, ensuring transparency, and protecting investors.
In short, a stock exchange is the heart of the stock market where shares are officially listed and traded, helping companies grow and allowing investors to participate in the economy.