A stock exchange is an exchange (or bourse) where stock brokers and traders can buy and sell shares of stock, bonds, and other securities.
To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but trade is increasingly less linked to such a physical place, as modern markets use electronic networks, which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is restricted to brokers who are members of the exchange. In recent years, various other trading venues, such as electronic communication networks, alternative trading systems and “dark pools” have taken much of the trading activity away from traditional stock exchanges.
The initial public offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market.
A stock exchange is often the most important component of an economy. Supply and demand in stock markets are driven by various factors that, as in all free markets, affect the price of stocks
A stock index is an indicator of the performance of overall market or a particular sector.
Indices can be designed and constructed in various ways – Depending upon their Methodology, they are classified