What is a stock exchange?

A stock exchange is a regulated marketplace where buyers and sellers trade financial securities such as stocks, bonds, and derivatives. It provides a structured platform ensuring transparency, liquidity, and fair pricing for investors. Companies list their shares on stock exchanges through an initial public offering (IPO) to raise capital for growth and operations. Well-known stock exchanges include the New York Stock Exchange (NYSE), Nasdaq, and the London Stock Exchange (LSE). Stock exchanges play a vital role in the economy by facilitating capital formation, enabling businesses to expand, and offering investors opportunities to grow wealth. They are strictly regulated to maintain investor confidence, ensure fairness, and prevent fraudulent or manipulative activities in trading.