Inside the World of Stock Trading

To understand how stock trading works, it is importmakers, electronic exchanges like the NASDAQ are
to first of all realize that its actual name is quitecomprised of a series of computers. It is not
misleading. Stocks are not actually "traded"; they aresurprising, then, that images of these types of
bought or sold. At any given moment, you can unloadexchanges are not popularly shown; they simply do
a stock that you want to get rid of; someone outnot evoke the kind of frenzied pace that an
there will surely buy it for the right price. Likewise,exchange floor does.
you can purchase any stock that you have anStock Brokers and Trades
interest in - as long as you have the necessary fundsWhether it is via a stock exchange floor or through
to pay for its current going rate. And that is the keyan electronic one, trades still must be facilitated by
to trading stocks: the concept of supply and demand.professional stockbrokers. Average stock buyers and
The Stock Exchangesellers do not have direct access to the exchange;
The buying and selling - or "trading" - of all stocksthat would introduce far too much chaos into an
occurs on stock exchanges. These are places wherealready volatile system. Instead, brokers are used as
people who would like to sell or purchase stocks getgo betweens for investors and the market.
together in order to do so more efficiently. ThereThey enforce the rules of the stock exchange. They
are many stock exchanges around the world; somemake sure that any given investor has the funds
famous ones include the New York Stock Exchange,necessary to make the purchase that they are
the Tokyo Stock Exchange and the Chicago Stockinterested in. They also guarantee that a fair price is
Exchange.adhered to, in order to keep the market from
When most people think of the stock exchange,spinning out of control needlessly. Top paid brokers
they picture scenes like those found on the floor inactually receive a price from an investor and run it
New York: traders running frantically around, gesturingdown on the exchange floor, attempting to broker a
wildly and a whole lot of chaos in general. Most ofdeal.
the people found on the floor of the NYSE areElectronic stockbrokers, like those found online, work
market makers, stockbroker and other specialiststo allow investors to make online trades. They act as
whose primary purpose is bringing buyers and sellersthe go between, in lieu of their human counterparts.
together at the exchange. Traditionally, this type ofLike their human versions, they enforce the rules of
arrangement was the only one available for stockthe stock exchange and follow the movements and
market transactions; in modern times, though, therefluctuations of the market - as well as its demands.
are alternatives.While electronic stockbrokers generally supply similar
Electronic exchanges use complex, cutting edgeinformation to that offered by human stockbrokers,
computer networks to complete all of theirthey require more deduction on the part of the
transactions. In lieu of stockbrokers and marketinvestor.