A stock exchange is a marketplace where people buy and sell shares of companies. Think of it as an organized platform that brings together buyers and sellers who want to trade ownership in businesses.
Companies list their shares on stock exchanges to raise money for growth and expansion. Investors buy these shares hoping their value will increase over time, creating a win-win ecosystem for both parties.
A stock exchange is like a big digital marketplace where people buy and sell shares of companies. Companies get "listed" on an exchange, and only then can their shares be traded. The exchange ensures every trade is recorded, prices are visible to everyone, and buyers and sellers follow proper rules.
Stock exchanges serve as the backbone of modern financial markets. They exist to make buying and selling shares easy, safe, and organized. Here's why they're essential:
Overall, stock exchanges support the economy by helping companies grow and create jobs, while giving everyday people opportunities to build wealth.
A stock exchange operates like a super-fast, well-organized digital marketplace where shares are traded. The process is seamless and happens in milliseconds:
A company gets listed on the exchange after meeting certain regulatory requirements and being approved for trading. Once listed, its shares become available for anyone to buy or sell.
Investors don't go directly to the exchange. Instead, they place buy or sell orders through brokers or trading apps, which act as intermediaries.
The stock exchange acts like a matchmaker. It searches for a buyer and seller who agree on the same price for a particular stock.
When a match is found, the trade is executed instantly at the current market price. This happens automatically and in just milliseconds.
The exchange records the trade and settles it, meaning the shares officially move to the buyer and the money goes to the seller. Everything is tracked and documented for transparency.
All of this happens automatically, safely, and efficiently, making trading fast, fair, and accessible to millions of people worldwide.
Imagine a stock exchange as a supervised trading playground, where shares are like toys that people want to swap. Before a company's shares can be traded, the company must get listed on the exchange—like getting permission to bring toys to the playground.
Investors who want to buy or sell shares place their orders through brokers, just like kids asking the teacher for help with a swap. The stock exchange, acting as the teacher, ensures everyone follows the rules, prevents cheating, and records every trade properly.
It also guarantees that buyers and sellers get fair prices, making sure both parties feel satisfied with their trade. Once the trade is matched, it's executed instantly, and ownership officially changes hands—all happening in milliseconds.
By supervising the process, the stock exchange keeps trading safe, organized, and fair, helping both companies and investors confidently participate in the market.
The world's first stock exchange was established in Amsterdam in 1602, created by the Dutch East India Company.
The oldest stock exchange in Asia is the Bombay Stock Exchange (BSE), established in 1875.
Share prices are determined by supply and demand between buyers and sellers, not by the exchange itself.
Most modern exchanges are fully digital, and trades are executed in milliseconds using advanced computer systems.