Stock Exchange

A stock exchange, or securities exchange is defined as a facility where stockbrokers and traders can buy and sell securities.

This includes shares of company stocks, bonds, exchange-traded funds (ETFs), or other financial instruments.

Stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events. This commonly includes the payment of income and dividends

Stock exchanges have developed into a permanent fixture in the financial market and some of the most visible entities in the entire industry.

The largest stock exchanges in the world are the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzhen Stock Exchange.

Stock exchanges are among some of the most recognizable constructs in the global financial system and provide a variety of utility to specific markets.

Why Stock Exchanges Matter?

Stock exchanges are also responsible for initial public offerings (IPOs) of company stocks and bonds to investors.

This is performed in both the primary market and subsequent trading in the secondary market.

It is important to note that not every company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities.

Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include various other trading venues.

This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges.