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| A place where securities are baught and sold by investors through the members of the exchange. |
A stock exchange is a place to trade securities of publicly held companies. Once a company makes an IPO, the securities start trading in the stock exchanges.
For a security to trade in a particular exchange, it needs to be listed in that exchange by following the rules set by them. Each exchange may have its own pre requisits. New York Stock Exchange, NASDAQ, Bombay Stock Exchange are few of the well known stock exchanges.
Each stock exchange will have its own members who are called as stock brokers. An investor will usually buy sell stocks through a stock exchanges using a trading member. The basic purpose of a stock exchange is to provide the liquidity. In earlier days, it was all physical and each member used to rise his voice to buy and sell the stocks. It usually was a messy affair. In today's cyber age, all broking offices are connected to stock exchanges and soffisticated softwares take care of matching buy or sell orders. |
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