What is Stock Exchange?

You often hear of that term but don’t really understand what is stock exchange. But if you trade intangibles like stocks, other securities or currencies, this is where you get your millions – or lose them.

A stock exchange is an organization, usually a corporation, that brings together stock brokers and traders by giving them facilities to carry out trading of stocks, other securities and other financial instruments. Does that sound so abstract? For a clearer picture of what is stock exchange, think of a market building and what you see inside. You see sections. Each section’s facilities define whom it caters to. The fresh meat and fresh fish sections have large freezers for storing raw meat; the produce section has coolers and display cases; the dry goods section has stock shelves for displaying items. People come to this place to buy and sell food items. A stock exchange is basically that. Although its sections, called markets, are not trading physically transferable goods and the markets per se are essentially not physically present within the building, a stock exchange is a virtual marketplace where sellers (issuing corporations or organizations) and buyers (traders) do their business.

But unlike ordinary marketplace, the prominent persons in a stock exchange are middlemen called stock brokers. They are regulated professionals who do the buying and selling of securities on behalf of investors. More often than not, stock brokers play the role of investment advisors to their clients. If you don’t understand what is stock exchange and how it works but would like to put your money where it gives you more than a regular savings account would, you’d want to go to a stock broker. But can you eliminate the stock broker from the picture? Find out more about stock exchanges and stock brokers with Forex Tracer, an automated investment advisor that works much like a real live one does.

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