<p>Generally, it's the place (e.g. NYSE) where the equity portion of company's capital structure trades publicly. The exchange creates a market for buyers and sellers of equity to meet and trade (think Ebay but for equity). </p>

<p>Equity is in contrast to the debt portion of a company's capital structure, which is often comprised mainly of term loans and revolvers provided by banks as well as as secured and unsecured bonds of the company purchased by investors. </p>

<p>To understand a stock market, it's important to understand priority of payments in a capital structure. Imagine a company goes bankrupt - this is the order in which stakeholders lose money (first to last): equity, unsecured bonds, secured bonds, 2nd lien term loan, 1st lien term loan.</p>

CC BY-SA 3.0
2015-08-07T17:21:01.890Z
2015-08-07T17:21:01.890Z
Adam Smith
<p>What is a stock exchange, I understand that it is a place where one buys and sells shares but I would like to know in more detail.</p>

CC BY-SA 3.0
2015-08-07T16:42:16.850Z
Hi. Welcome to Economics.SE. As is, this question is probably too broad to answer. Is there a specific piece of stock exchanges that you would like to know more about? If so, please edit your question to reflect this.
cc7768
<macroeconomics>
What is a Stock exchange?
user5383
# What is a Stock exchange?

(Asked by: username_0 on 2015-08-07)

What is a stock exchange, I understand that it is a place where one buys and sells shares but I would like to know in more detail.

**Tags:** macroeconomics
> **Comments:**
> **username_1**: Hi. Welcome to Economics.SE. As is, this question is probably too broad to answer. Is there a specific piece of stock exchanges that you would like to know more about? If so, please edit your question to reflect this.  

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## 1 answers

### Answer by username_2 on 2015-08-07. Score: 0 | Accepted answer

Generally, it's the place (e.g. NYSE) where the equity portion of company's capital structure trades publicly. The exchange creates a market for buyers and sellers of equity to meet and trade (think Ebay but for equity).

Equity is in contrast to the debt portion of a company's capital structure, which is often comprised mainly of term loans and revolvers provided by banks as well as as secured and unsecured bonds of the company purchased by investors.

To understand a stock market, it's important to understand priority of payments in a capital structure. Imagine a company goes bankrupt - this is the order in which stakeholders lose money (first to last): equity, unsecured bonds, secured bonds, 2nd lien term loan, 1st lien term loan.


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