A stock exchange is an organized marketplace where stocks (shares of ownership in companies) and other securities such as bonds are bought and sold between investors. It serves as a centralized platform that facilitates trading by connecting buyers and sellers, enabling companies to raise capital and investors to trade shares

. Key features of a stock exchange include:

• It can be a physical location, like the New York Stock Exchange (NYSE), or a fully electronic platform, like Nasdaq

• Companies list their shares on an exchange through an initial public offering (IPO), after which those shares can be freely traded on the secondary market

• Exchanges provide liquidity, meaning investors can buy or sell shares relatively easily due to the presence of many buyers and sellers

• They operate under rules and regulations set by governing bodies (e.g., the U.S. Securities and Exchange Commission) to ensure fair trading and investor confidence

• Stock exchanges also offer transparency by providing real-time price information on traded securities

In summary, a stock exchange is a regulated marketplace that facilitates the trading of stocks and other securities, playing a crucial role in capital allocation and the overall functioning of the financial system