How Stock Trading Works
Brokers buy and sell stocks through an exchange. Often
charging a commission to do so. A broker is a person who is licensed to trade through the Exchange. A broker is either on
the trading floor or can make trades by phone or on his computer
An exchange is like a warehouse in which you can buy and
sell stocks. A person or computer must match a buy order to a sell order. and
vice versa. Some exchanges work like auctions on an trading floor and match buyers to sellers electronically. Some
examples of stock exchanges are…
The New York Stock Exchange.
The NASDAQ.
The Tokyo Stock Exchange.
Worldwide Stock Exchanges has a list of major exchanges.
Over-the-counter stocks are not listed
on a exchange and you can look up
information on them at the OTC Bulletin Board.
When you buy and sell stocks online you're using an online
broker that takes the place of a human broker.
You still use money but instead of talking to someone about what to invest in you
decide which stocks to trade and you request
trades yourself. Some brokerages
offer advice from live brokers and broker assisted trades as part of their
service.
If you need a broker to help you with your
trades, you'll need to choose a firm that offers that service
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