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.
Each exchange trades in its own time zone, so a stock only trades when its home market is open. The gaps between sessions are why overnight news makes a price jump at the reopen.
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.
Learn it by doing
That's Exchange in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 5, How Markets Work Globally).
Try the free lesson →Why it matters to you
Exchanges matter because they're the machinery that turns a jumble of buy and sell orders into a single, trustworthy price — and their hours quietly shape how you can trade. Knowing that a stock only trades when its home exchange is open explains overnight gaps, why after-hours prices are thin and jumpy, and why a globally diversified investor holds assets across markets that are never all open at once. The exchange is the stage; the hours set the show times.
⚠ Forgetting the market can be closed
An order placed while an exchange is shut doesn't execute at the last price — it waits, and can fill at a very different level when the market reopens after overnight news. Assuming you can trade any stock at any time, or that your order fills instantly regardless of the clock, leads to surprise gaps. Check the exchange's hours.