What Are Stock Exchanges and How Do They Operate?

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First of all, a stock exchange doesn’t own shares. Instead, a stock exchange acts as a market where stock buyers get in touch with stock sellers. As a reminder, to trade, stocks can be traded on a number of stock exchanges.

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Interesting details about stock exchanges

It is worth noting that a stock exchange is a place where various financial instruments are traded. Without exaggeration, stock exchanges play an important role in the modern world. They connect corporations as well as governments together with investors. What’s important, they help provide liquidity in the market.

Moreover, they make sure that trading occurs in a well-organized manner so essential financial information can be passed to interested parties.

What many people might not be aware of is that they (stocks) become available on a stock exchange after a company conducts its initial public offering (IPO.)

Bombay Stock Exchange and its importance

Now, let’s discuss one stock exchange. What do you know about the Bombay Stock Exchange (BSE)? What you need to know is that it is one of the largest exchanges in the world.

Unsurprisingly, it is the first as well as largest securities market in one of the most populous countries in the world. Interestingly, the history of the BSE dates back to the 19th century. 

It is based in Mumbai, the de facto financial capital of India and the second-most populous city in the country. It played an important role in India. For example, the above-mentioned exchange helped develop the country’s capital markets.

Do you know which is the first stock exchange in Asia? The answer is pretty straightforward: The Bombay Stock Exchange.

More than 20 years ago, the world’s one of the largest exchanges started using an electronic trading system. As of 2022, such systems are quite common all over the world. Besides, it is a good idea to visit its website.

We need to mention that securities that the Bombay Stock Exchange lists include stock futures, index futures, stocks, etc. The above-mentioned exchange’s overall performance is measured by Sensex. As a reminder, it is a benchmark index that consists of the Bombay Stock Exchange’s most prominent as well as most actively traded stocks encompassing 12 sectors. It is worth mentioning that the Sensex has existed for more than 30 years.

As you already know, Mumbai is the de facto financial capital of the country. If you want to take a glimpse of a building of the world’s one of the largest exchanges, you need to visit Dalal Street. Last but not least, the BSE has been situated on the street stated earlier for a very long time. Furthermore, feel free to read about the history of the Bombay Stock Exchange. Also, it is a great idea to learn as much as possible about various trading strategies in order to adapt to the ever-changing reality. Moreover, don’t forget to read articles as well as books concerning rules and regulations.

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