What Is a Stock Exchange?

Introduction

When you buy a share of Apple or Nike, the trade usually happens through a stock exchange. Stock exchanges are marketplaces where buyers and sellers trade shares of companies. The New York Stock Exchange and Nasdaq are the two biggest in the United States. Together, they handle trillions of dollars in trades every year.

How an Exchange Works

An exchange matches people who want to buy shares with people who want to sell them. Prices change constantly based on supply and demand. Today, almost all trading happens electronically, in fractions of a second. When you place an order through a brokerage app, your broker sends it to be filled at the best available price.

NYSE vs. Nasdaq

The New York Stock Exchange, founded in 1792, is the oldest and largest in the U.S. Its famous trading floor on Wall Street still operates, though most trading is electronic. Nasdaq, founded in 1971, was the world's first electronic stock market. Many big tech companies, like Apple, Microsoft, and Nvidia, are listed on Nasdaq.

Why Exchanges Matter

Exchanges give companies a way to raise money by selling shares to the public through IPOs. They give investors a reliable place to buy and sell with clear rules. Companies must meet requirements and share financial information to be listed. That transparency helps build trust in the markets.

Conclusion

Stock exchanges are marketplaces that connect buyers and sellers of shares. The NYSE and Nasdaq are the biggest in the U.S., and most trading now happens electronically. They help companies raise money and give investors a fair place to trade. Now you know where the market really happens!