Investing term
What is Exchange?
Where buyers and sellers of the same stock meet to trade.
An exchange is a regulated marketplace that matches buyers and sellers of the same security and publishes the official price for every trade. Each one runs its own electronic order book — the NYSE and Nasdaq in the US, the London Stock Exchange in the UK, the Tokyo Stock Exchange in Japan — and most stocks have a single "home" exchange where they're listed.
An easily overlooked detail: every exchange keeps its own trading hours in its local time zone. US markets run 9:30am–4:00pm Eastern, London runs 8:00am–4:30pm UK time, and Tokyo even breaks for lunch. When an exchange is closed its stocks simply don't trade there — which is why news that breaks overnight can make a price "gap" up or down the instant the market reopens.
For example
Place an order for a London-listed stock at 7pm London time and nothing happens until the LSE opens next morning — the market is closed, so there's no order book to match against.
Exchange is taught hands-on in Stage 5 — How Markets Work Globally.
See the lesson →