Exchanges

An exchange is a regulated marketplace where buyers and sellers trade standardized financial instruments or assets under a common set of rules. Exchanges provide venues for price discovery, liquidity, and transparent trade execution across products such as equities, bonds, commodities, derivatives, and, in many markets, digital assets.

Most traditional exchanges are electronic today and may also maintain a physical trading floor in some cases. They use an order book and a matching engine to pair buy and sell orders, producing trades at mutually agreed prices. Trades are executed at the best available prices according to the exchange’s rules, with outcomes visible to participants on real-time data feeds.

Beyond trading, exchanges often administer listing standards for issuers, supervise market activity to deter manipulation, and provide clearing and settlement services through affiliated entities. Settlement cycles vary by instrument and jurisdiction (for example, T+2 is common for many equities). Exchanges also regulate market conduct, surveillance, and disclosure to maintain market integrity.

Participants include retail and institutional traders, brokers, market makers, and liquidity providers. Access to exchanges is typically via member firms or approved brokers, with varying levels of market access and compliance obligations.

Major traditional exchanges include the New York Stock Exchange, Nasdaq, London Stock Exchange, and Tokyo Stock Exchange, as well as derivatives and commodity exchanges such as CME Group. In digital asset markets, centralized cryptocurrency exchanges and decentralized exchanges offer similar functions for trading tokens and coins, with differing custody, liquidity, and security models.