Once these shares are available to the public, they can be traded in the secondary market. The investor can buy the share from another investor at the current market price or for the price agreed by the buyer and seller. The stock market refers to the collection of exchanges and markets where stocks of publicly held companies, bonds, and other securities are traded. The stock market is one of the most vital components of the economy, as it provides companies with capital by giving the investors a part-owner of the company.

The stock exchange enables the stockbrokers for trading in securities and stocks of companies. You can buy or sell stocks only if they are listed on any exchange. The stock exchange is where the sellers and buyers of stocks meet. The important stock exchanges in India are the Bombay Stock Exchange and the National Stock Exchange.

Stocks of large companies are traded through stock exchanges, which bring together buyers and sellers in an organized manner. Today, all stock market trades are electronically executed, as most of the stocks are held in dematerialized electronic form, and not physical certificates.

Trading at the exchanges is done by the trading computer, which does the order matching. The trading process is order-driven, where the orders placed by investors are automatically matched by the computer with the best limit orders. There is no way of knowing who the buyers and sellers are. As the trading system displays all the buy and sells orders, there is a great deal of transparency. All orders have to be placed through brokers, and most of them provide an online trading platform to their customers.

Founded in the year 1972, The New York Stock Exchange (NYSE) is on Wall Street (The term Wall Street is also used as a synonym for the NYSE), and Nasdaq which was established in 1971 are the two biggest stock exchanges in the United States In terms of market capitalization. Nasdaq which originally featured over-the-counter (OTC) securities now list all types of stocks. If the stock meets the listing criteria, they can be listed on either exchange. Technology firms in general tend to be listed on the Nasdaq.

The NYSE is the largest and most powerful stock exchange in the world. Although Nasdaq has more companies listed, in terms of market capitalization, NYSE is larger than Tokyo, London, and the Nasdaq combined.