Stock Exchange
A stock exchange is a regulated marketplace where listed securities are bought and sold under set rules for trading, pricing and disclosure.
A stock exchange is an organized market that brings buyers and sellers of securities together. It sets the rules for how trades are matched, publishes prices, and requires listed companies to meet certain standards, such as filing regular financial reports.
Today nearly all exchange trading is electronic. Orders from brokers flow into the exchange's systems, where they are matched by price and time. The exchange then reports each trade publicly so everyone can see the latest price and volume.
The two largest exchanges in the United States are the New York Stock Exchange and Nasdaq. Other well-known exchanges include those in London, Tokyo, Hong Kong and Frankfurt. A company that wants its shares traded on an exchange must apply for a listing and meet requirements on size, number of shareholders and financial reporting.
Individual investors do not trade directly on an exchange. Instead, they place orders through a broker, which routes them to an exchange or another trading venue. In the US, exchanges are overseen by the Securities and Exchange Commission.