How the Stock Market Actually Works

A stock exchange is a marketplace where buyers and sellers meet to trade shares of publicly listed companies — the New York Stock Exchange (NYSE) and Nasdaq are the two biggest examples in the United States, and most countries have their own. Nobody physically hands over paper certificates anymore; it's all electronic, matching millions of buy and sell orders every single day.

Every company traded on an exchange has a ticker symbol: a short, unique code used to look it up and trade it, like AAPL for Apple or MSFT for Microsoft. Instead of typing out a full company name every time, traders and investors just use the ticker.

AAPL  →  Apple Inc.
MSFT  →  Microsoft Corporation
KO    →  The Coca-Cola Company

A short, unique code used to look up and trade a specific company's stock, like AAPL for Apple, is called a ____.

At the core of every exchange is order matching: someone willing to buy states the price they'll pay, someone willing to sell states the price they want, and when those two prices meet, a trade happens instantly. Modern exchanges run this matching electronically, at massive speed and scale, which is why a trade you place today usually executes within moments.

What is a stock exchange?

Every publicly traded company has its own unique ticker symbol.