A stock exchange is a platform or market where publicly traded companies issue and trade their shares of stocks with investors. The main function of a stock exchange is to provide a regulated and organized marketplace where buyers and sellers can easily transact their shares of stocks.
When a company decides to go public, it issues a certain number of shares, which are sold to the public through an initial public offering (IPO). After the IPO, these shares can be traded on a stock exchange, and their prices are determined by supply and demand.
The exchange provides a platform for buyers and sellers to exchange shares, and each transaction is recorded and executed by a broker or a specialist who acts as an intermediary. The exchange ensures that all trades are fair and transparent by enforcing strict regulations and procedures.
There are several major stock exchanges around the world, including the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange (LSE), and Tokyo Stock Exchange (TSE). Each exchange has its own set of rules and regulations, but they all operate on similar principles.
In summary, a stock exchange provides a marketplace where shares of publicly traded companies can be bought and sold by investors, and its operations are regulated to ensure fair and transparent trading.
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