Stock Exchange Definition

Definition of “Stock Exchange”

Stock Exchange Definition:
A stock exchange is a marketplace in which securities (stocks) are traded. Stock exchanges give companies a platform to sell securities to the investing public and is where stock brokers and investors/traders can buy and sell stocks.

The main function of a stock exchange is to ensure fair and orderly trading, as well as accurate price information for any securities trading on that exchange.

More On Stock Exchanges

A stock exchange is basically a marketplace where participants meet to buy and sell shares of stock. It provides a single, neutral location for everyone to come together to execute trades.

An exchange can either be a physical location where traders meet to conduct business or an electronic platform. Nowadays, the majority of trades are done electronically.

An exchange is actually an institution or organization which hosts a market where stocks are traded, such as the New York Stock Exchange (NYSE) or NASDAQ.

Each exchange will have certain listing requirements for companies that would like to offer securities for trading on that particular exchange. Some exchanges have stricter requirements than others, but basic requirements for stock exchanges include regular financial reports and audited earnings reports.

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Read Our Tutorial on How Stock Exchanges Work