What is Stock Exchange?
A Stock Exchange also referred to as bourse or securities exchange is an exchange marketplace where stock brokers 52 and traders can buy and sell bonds, ETF's and various types of financial instruments. A Stock Exchange does not own shares but it acts as a market where stock buyers connect with stock sellers. Stocks traded on a Stock Exchange include securities issued by listed companies, trusts, derivatives, pooled investment products and bonds. Stocks can be traded on numerous exchanges such as the NASDAQ (National Association of Securities Dealers) and the NYSE (New York Stock Exchange) in the United States. Although today most securities are traded through an online stock broker, it is vital to understand the relationship between Stock Exchanges and the companies that trade on them.
STOCK EXCHANGE IS A MARKETPLACE
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BURSE MAY REFER TO EXCHANGE
Key Takeaways
» A stock exchange is a physical or recently virtual marketplace that collects companies and governments so that investors can buy and sell stocks or other investment instruments.
» The largest US Stock Exchanges, NASDAQ and NYSE are auction-based Stock Exchanges that used to allow traders and brokers to communicate about buy and sell transactions. Nowadays these Stock Exchanges allow online stock brokers to execute buy and sell orders through electronic communication network on electronic platforms without physical location for trades.
» Trade on a Stock Exchange is restricted to licensed stock brokers.
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