What is a Stock Exchange?

A stock exchange is an organised marketplace where buyers and sellers come together to trade shares of publicly listed companies. It provides the infrastructure, rules, and oversight that make trading possible in an orderly and transparent way.

How does a stock exchange work?

When you place an order to buy shares through your broker, that order is routed to a stock exchange. The exchange matches your order with someone who wants to sell. This happens electronically in fractions of a second. The exchange records the transaction and the price becomes part of the public record.

What are the major stock exchanges?

The New York Stock Exchange, known as the NYSE, is the largest in the world by the total value of listed companies. The Nasdaq is the second largest and is known for its technology listings. In Europe, Euronext operates exchanges across Amsterdam, Brussels, Paris, Lisbon, and Dublin. The London Stock Exchange, the Frankfurt Stock Exchange, and many others serve their own regional markets.

Why do companies choose a particular exchange?

Each exchange has its own listing requirements around size, profitability, governance, and reporting. Some companies choose an exchange based on where their investors are, where their industry peers list, or which exchange offers the most favourable conditions.

Do you need to access an exchange directly?

No. As a private investor you access exchanges through a broker. The broker handles the connection to the exchange on your behalf. You simply place an order and the broker does the rest.