What is a stock exchange?

A stock exchange is a regulated marketplace where financial securities like stocks, bonds, and derivatives are bought and sold. It serves as a platform for companies to raise capital by issuing shares to the public, and for investors to buy and sell those shares. Companies must meet specific requirements to be listed on an exchange. Transactions are facilitated by brokers and follow standardized rules to ensure transparency and fairness. Major global stock exchanges include the New York Stock Exchange, London Stock Exchange, and in India, the Bombay Stock Exchange and National Stock Exchange. The stock exchange plays a key role in the economy by enabling capital formation, price discovery, and providing liquidity for financial instruments.