A stock exchange is an organised marketplace where financial products such as shares and bonds are bought and sold. It is the place where supply and demand meet and where prices are determined. Without a stock exchange, it would be much more difficult to connect investors and companies.

On the exchange, prices are continuously determined by buyers and sellers who place orders.

A stock exchange ensures that trading takes place in a fair, transparent manner and according to fixed rules. Companies can raise capital through the exchange by issuing shares, while investors can buy or sell these shares. The price of a share changes constantly because buyers and sellers are willing to pay or accept different amounts. Modern exchanges are largely digital and transactions are processed within seconds. The exchange itself does not buy or sell shares, but only facilitates trading between market participants.

Short example:

Suppose a company has a share that is traded on the exchange for €50. An investor wants to buy and places a buy order at €50. Another investor wants to sell and accepts €50. The exchange ensures that this transaction is executed. If there are more buyers than sellers, the price may rise to, for example, €52. If there are more sellers than buyers, the price may fall to, for example, €48.

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