U.S. Equity Markets 101

What is a stock exchange?

A stock exchange is a marketplace where participants meet to buy and sell shares of stock. It provides a single, neutral location for investors to come together to execute trades. In today's market, virtually all trading occurs electronically across a number of different stock exchanges, all of which facilitate the matching of buyers and sellers in order to execute trades.

Who are the customers of a stock exchange?

Exchange customers are registered broker-dealers. Individual investors and institutions, such as mutual fund companies, do not connect directly to stock exchanges, but rather trade through their brokers, who connect to the Bats exchanges and other exchanges to execute trades.