Exchange Trading refers to buying and selling financial instruments, such as stocks or commodities, through a regulated exchange. This means that transactions are conducted in an organized market where standardized rules apply, ensuring fairness for all parties involved.
In this type of trading, orders from buyers and sellers are collected by the exchange's brokers who then match them with each other to complete a transaction. The price at which these transactions occur is determined by the forces of supply and demand in the marketplace. This process creates liquidity for investors as they can easily buy or sell securities without having to search for individual counterparties.
Exchange Trading also provides transparency, as all trades are recorded and made publicly available. This allows investors to make informed decisions based on current market activity. Overall, Exchange Trading is a efficient way of buying or selling financial instruments in a regulated environment that benefits both buyers and sellers.