An exchange where stockbrokers and traders may purchase and sell assets, such as shares of stock, bonds, and other financial instruments, is known as a stock exchange, securities exchange, or bourse.
The creation and redemption of such securities and instruments as well as capital events, such as the payment of income and dividends, may be accommodated by stock exchanges.
Stock issued by listed firms, unit trusts, derivatives, pooled investment products, and bonds are examples of securities traded on a stock market.
Buyers and sellers complete deals in a central place, such as the exchange floor, or by using an electronic trading platform, which is how stock exchanges sometimes operate as “continuous auction” markets.
A securities must be listed on a certain stock exchange before it may be traded there.
Even while there is typically a central site for maintaining records, commerce is becoming less dependent on physical locations as modern markets employ electronic communication networks, which have the advantages of higher speed and lower transaction costs.
Only brokers that are members of the exchange are permitted to trade on the exchange.
Other trading venues, including electronic communication networks, alternative trading platforms, and “dark pools,” have largely displaced traditional stock exchanges as trading hubs in recent years.
Last Updated on 1 year by pinc