Security groups act as virtual firewalls for Amazon EC2 instances to control both inbound and outbound traffic. They operate at the instance level and provide stateful filtering, meaning that if you allow an inbound request, the response is automatically allowed regardless of outbound rules.

• Security groups (Correct): Virtual firewalls that control traffic to and from EC2 instances
• Amazon Route 53: AWS's DNS web service for domain registration and routing
• AWS Direct Connect: Dedicated network connection from on-premises to AWS
• Amazon VPC: Virtual private cloud that provides network isolation, but security groups handle the actual traffic control for instances within the VPC