What is a Stock Exchange?

Answer:
A stock exchange is an organized marketplace where securities are bought and sold by members.

These members either act on their own behalf or as agents for their customers. Prices are not determined by the stock exchange rather they are determined based on supply and demand. In addition the exchange doesn’t buy or sell the security. Instead it is facilitates the sales and is a gathering place for members to conduct their business.

The New York Stock Exchange , the American Stock Exchange, and the NASDAQ are all examples of stock exchanges.

Stock exchanges provide the facilities where stock brokers and traders gather to trade company stock and securities. Among the securities traded on stock exchanges are shares issued by companies, bonds, and unit trusts. Securities must be listed with a particular stock exchange in order to be traded there. In addition, in order to trade, individuals must be members of the exchange. Stock can also be traded off the exchange which is known as “over the counter.”

In order to be listed with a particular stock exchange, companies must meet certain criteria. For example, a company must have earned over $10 million over the last three years and issue at least one million shares of stock worth at least $100 million in order to be listed on the New York Stock Exchange.


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