Stock Exchange Definition

A stock exchange is a market where stocks and other securities are traded. Stock exchanges may also provide facilities for the issue and redemption of other securities, such as bonds, and the payment of dividends. The securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, and bonds.

Most stock exchanges are open only to members and their brokers. Only they can trade directly on the exchange floor or electronically through the exchange’s trading system. The public can buy or sell these securities through a broker.