Exchange - Stock Trader Glossary

An exchange or stock exchange is a marketplace where financial instruments such as stocks, bonds, commodities, and currencies are bought and sold. Exchanges provide a centralized location for buyers and sellers to trade these instruments and establish prices based on supply and demand. Exchanges also provide a range of services such as trade clearing, settlement, and market data.

The New York Stock Exchange (NYSE) and Nasdaq are two of the largest and most well-known stock exchanges in the United States. The NYSE is a traditional exchange where stocks are traded in a physical location, while Nasdaq is an electronic exchange where trades are made electronically.

In addition to these exchanges, there are many other exchanges around the world that specialize in different types of financial instruments. For example, the Chicago Mercantile Exchange (CME) is a futures exchange where commodities such as corn, wheat, and oil are traded.

In summary, an exchange is a marketplace where financial instruments such as stocks, bonds, commodities, and currencies are bought and sold. Exchanges provide a centralized location for trading, establish prices based on supply and demand, and provide a range of services such as trade clearing, settlement, and market data. There are many different types of exchanges around the world that specialize in different types of financial instruments.