A stock exchange is a market place where one can buy/sell stocks (Trade shares) with other members. Apart from stocks, other security instruments like bonds, ETFs, derivatives are also traded.

A stock exchange will offer memberships who can only do transactions in that stock exchange. Due to the high membership fees and complex nature of working, usually individual traders and investors trade through a member who is known as a stock broker.

Even high networth individuals (HNIs), Financial institutes many a time prefer to invest through a stock broker.

Usually stock exchanges facilitate transactions for the market known as secondary markets.

A stock exchange is a big part of a stock market.

More about these terms in coming chapters.

As a first step to begin investing in stocks, you need a stock trading/investing account.

You need to identify a good stock broker who facilitates stock market investments in your local area. Talk to few of your friends around you who invest in stocks to find out the best guy.

It is a combination of low commissions and good service.

You can also invest in initial public offers for which also it is good to have an online account.

Usually stock brokers facilitates your stock investments both through online mode (online trading) or through offline means (You call them and ask them to buy some shares)

These stock brokers are affiliated to one or more stock exchanges. More details on stock exchanges in your next lesson.

Happy investing!!! All the best.