The Basics On Stock Trading
The concept of trading fundamentally consists of the buying and selling of stocks among individuals or companies through brokers. Through buying a share of stock or a share of ownership in a particular company, an individual can then benefit and earn money from however the company they invested on may fair in the market.
There are two basic methods in which the stock market operates –on the exchange floor where buying and selling is done more traditionally and electronically where technology takes on the exchange game.
Trading On The Exchange Floor
The trading that occurs on the more traditional exchange floor of the New York Stock Exchange (NYSE) is basically what most of us have become accustomed to from seeing it in the movies and on television. Basically, the NYSE consists of many brokers who negotiate the deals for individuals to be able to trade stocks.
As chaotic as the stock exchange floor may seem, there is actually a common pattern that occurs among most simple trades. First, an order to buy a certain number of stocks would be negotiated through a broker. After this, the broker’s order department would forward this arrangement to their floor clerk on the exchange. The floor clerk would then inform the company’s floor traders in order to find other traders that are willing to sell the equal number of stocks from the company that is offered to be bought. After the two parties agree on a price and close the deal, the message would be forwarded back up the line, and the broker would then inform the interested buyer on the final price.
Negotiations may take a few minutes or even longer, depending on the performance of the stocks as well as the market. For more complex trades and larger orders of stocks however, there may be a more complicated process but the principles basically remain the same.
Trading Electronically
A growing trend these days however, is trading stocks electronically, which is done through advanced computerized systems. Unlike the NYSE that generally operates through the manpower of brokers, its counterpart, the National Association of Securities Dealers Automated Quotations (NASDAQ), trades stocks completely through electronic means.
These electronic markets forgo with human stockbrokers and instead make use of advanced computer networks to match buyers and sellers. And through this method, transactions are usually faster and more efficient.
Through electronic trading, investors get many benefits such as being able to get faster confirmations, as well as facilitating control by having online investing readily available through the Internet. However, brokers basically still handle the trades, as investors do not have direct access to the electronic markets.
The process that takes place in both methods however, is usually hidden from investors. Typically, if you are an investor, a call from your broker and regular reports on your stock investments would be provided for you, but you will not really get to see what is happening behind the scenes.
Through the investments that individuals make, many businesses are kept afloat and running. And in exchange for this, investors get a fair share of earnings. Stock trading may be a complex process, but at the end of the day, many people basically benefit from all of it. As a result, the whole concept becomes simple.
Comments
Menu
My Articles
Getting Smart On Day TradingThe Basics On Stock Trading
Making A Smart Stock Investment
The Advantages Of Online Stock Trading
Stock Option Trading - Starting Out On The Basics
Stock Trading Software: How Does It Help You?
Introduction To Forex Trading
Factors That Influence Forex Market Trends
Comparing The Two Types Of Investments
Finding The Right Online Stock Broker
The Difference Between Trading Stocks And Stock Options
The Advantages Of Trading Stock Options
What You Should Know About The Stock Trading Robot
Stock Options - Comparing The Two Types
Trading Options And Futures - Comparing The Two Types Of Contracts
Stock Trading - When Should You Sell Stocks?
The Problem With Penny Stock Trading
What You Need To Know About Day Trading
Improving Your Chances In Stock Trading
Tips For Online Stock Trading
Stock Trading Computers - Are They Always Helpful?
Familiarizing Commonly Used Stock Market Terminologies
Related Sites | My Articles Stock Options - Comparing The Two Types The trade for stock options is fast on the rise in the market these.. Comparing The Two Types Of Investments There are two major types of investments done in the.. Familiarizing Commonly Used Stock Market Terminologies The stock market is a great arena for people to make a lot of money,.. |
|
|
Related News:
|