Lakhasly

The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market.Trade on an exchange is by members only.

The Stock Exchange

A stock exchange is an entity which provides trading facilities for stock brokers and traders to trade stocks and other securities, Stock exchanges also provide facilities for the issue and redemption of securities as wel as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.

To be able to trade a security on a certain stock exchange, it has to be listed there. Trade on an exchange is by members only. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. The initial 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 a stock market. Supply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks. Increasingly, stock exchanges are part of a global market for securities.