Stock Exchange

A stock exchange is a centralized, regulated marketplace where buyers and sellers come together to trade securities such as stocks, bonds, and other financial instruments. Stock exchanges provide the infrastructure and rules that ensure fair, orderly, and efficient trading. The two largest stock exchanges in the world are the New York Stock Exchange (NYSE) and the NASDAQ, both located in the United States. Other major exchanges include the Tokyo Stock Exchange, London Stock Exchange, Shanghai Stock Exchange, and Euronext. Each exchange has its own listing requirements that companies must meet to have their stocks traded there. Historically, stock exchanges were physical locations where traders would gather on a trading floor to buy and sell securities through open outcry - literally shouting orders at each other. Today, most trading is done electronically through computer networks, making transactions faster, cheaper, and more accessible to investors worldwide. Stock exchanges serve several important functions in the economy. They provide liquidity, meaning shareholders can easily convert their investments to cash by selling their shares. They facilitate price discovery through the interaction of buyers and sellers. They also enable companies to raise capital by issuing new shares to the public through initial public offerings (IPOs). Exchanges are highly regulated to protect investors and maintain market integrity. In the United States, the Securities and Exchange Commission (SEC) oversees stock exchanges and enforces securities laws. Exchanges themselves also have rules governing trading practices, disclosure requirements, and corporate governance standards. To trade on an exchange, individual investors typically work through licensed brokerage firms that execute trades on their behalf. Modern online brokerages have made stock trading accessible to anyone with an internet connection and a small amount of capital to invest.