Stock exchange - Financial definition
Concise definition of the term stock exchange
A stock exchange is a regulated marketplace where securities such as stocks and bonds are bought and sold. It facilitates the trading of financial instruments between buyers and sellers.
Comprehensive definition of the term stock exchange
In the broader financial context, a stock exchange serves as a crucial component of the global capital markets, enabling companies to raise capital by issuing shares to the public. Examples of major stock exchanges include the New York Stock Exchange (NYSE) and NASDAQ. Beyond trading equities, stock exchanges often support the trading of derivatives, commodities, and other financial products. They ensure transparency, liquidity, and price discovery through well-established rules and practices, attracting both individual and institutional investors.