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· Posted on
August 16, 2021

What is a stock exchange?

Like a place where you trade shoes or books, the stock exchange is a place to trade shares.

What's the key learning?

  • Stock exchanges, also called sharemarkets, are where the public - aka you and me - can purchase shares in a company.
  • In Australia, our stock exchange is called the ASX.
  • 'Shares' and 'stocks' can mean the same thing, but they do have their own meaning.

Stock exchange, sharemarket... pot-A-to, pota-TO. You know what I mean.

These two terms are used pretty much interchangeably, and they both mean a centralised location where the public - aka you and me - can purchase shares in a company.

In Australia, our stock exchange is called the ASX. So all Australian companies will trade on the ASX, which is influenced by Australia’s economy. But in the US, the exchange goes by NASDAQ/NYSE.

So what's the difference between shares and stocks?

Again, the terms 'shares' and 'stock's can mean the same thing. However, they do both have their own meaning.

'Stocks' is the broad term that is used when someone has ownership in a company. 'Shares' is the exact amount of ownership in a company.

So, you might own CBA stocks. Or, you might own 100 shares in CBA. Same-same, but different.

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