Stock Exchange: Importance, Features, And Reasons To Trade

A stock exchange is considered to be a vital element when it comes to the capital market. It is a safe avenue to get investment news, trade systematically, wherein the stocks and securities are purchased and sold according to well-framed rules and regulations.

The term securities refer to the shares and debentures issued by a public company that is rightly listed on the stock exchange, bonds, and debentures issued by government entities and public and municipal bodies. In order to know more about the share market, you can refer to a number of articles, blogs, and other related content through a financial news app.

Generally, bonds get traded over-the-counter (OTC). However, some corporate bonds are also sold on a stock exchange. It can enforce rules and regulations on the firms and brokers enrolled with them. In simple terms, a stock exchange refers to a forum wherein securities are bought and sold; this can be done offline or online.

A stock exchange acts as an economic barometer that indicates the economy’s condition. All the major and minute modifications about the share market get recorded there. It is correctly stated that a stock exchange is the economy’s pulse, which shows a country’s current economic position.

Share market guides in valuing the securities after researching thoroughly regarding the stock market news according to the demand and supply factors. The securities provided by companies considered profitable and growth-driven tend to be valued at a higher price. Thus, valuing the securities allows various stakeholders, such as investors, creditors, and the government, to conduct their respective duties.

Transactional security is also assured since the securities that get traded on the stock exchange are listed, and this listing is done after the verification of the company’s position is done. All listed organizations must comply with the rules and regulations the respective governing body sets.

The stock exchange is a platform for facilitating the trading of securities of many companies. This trading procedure consists of constant reinvestment and disinvestment, creating opportunities for capital formation and economic growth.

The stock exchange also lets you receive share market news and other updates regarding investing in equity markets by rolling out new issues to motivate more and more people to invest in securities.

Therefore, by allowing healthy speculation practices of the securities, the stock exchange also assures the demand and supply of shares and securities and their liquidity by providing a robust space for trading securities.

Features of Stock Exchange:

  • A market platform for trading securities: It is a full-fledged market wherein various securities from government companies, corporate companies, and semi-government companies are traded.
  • Transaction: The transaction can be conducted only via registered members and brokers.
  • Recognition: It is to be recognized by the central government.
  • Measuring tool: It forms and indicates the safety and growth of any business in the stock exchange index.
  • Functions according to the rules: All the transactions at the stock exchange are supervised by the stock exchange regulations along with SEBI guidelines.


Nowadays, the Internet has contributed significantly to getting stock news and enhancing stock market trading. Stocks and securities are increasingly becoming convenient and accessible for one and all. Individuals and other organizations might now be ready to trade easily in the share market through the internet.

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