| There is an image that comes to people's minds | | | | process to the broker, who informs the investor of |
| when stock trading is mentioned. An enormous floor | | | | the finalized details. |
| with men in business suits yelling and gesturing. There | | | | Negotiations between traders depend on the status |
| seems to be no rhyme or reason to their shouting. | | | | of the market and how well the shares are |
| This is an idealized movie version of the New York | | | | performing. The bargaining can take anywhere from |
| Stock Exchange. In fact, stock trading is a | | | | just a few minutes to longer. If the order is large or |
| complicated process that keeps businesses in | | | | complex, the foundation of trading remains the same |
| operation and investors earning money. | | | | but there may be more complicated procedures to |
| The foundation of stock trading is that of companies | | | | follow. |
| offering shares in their business for purchase and | | | | Electronic Trading |
| sale. Investors that buy the shares receive a | | | | Computers and technology are ushering in a new |
| proportionate ownership in the company. How well a | | | | trend in trading stocks. The National Association of |
| business does on the market determines how much | | | | Securities Dealers Automated Quotations trades |
| profit an investor earns. | | | | stocks wholly through advanced online systems. |
| There are two different systems for access to the | | | | Traditional stockbrokers are dispensed with by online |
| stock market. The first is on an exchange floor | | | | stock markets. Computers instead pair up buyers and |
| where buying and selling shares is executed through | | | | sellers. Transactions executed in this matter are |
| traditional means. The second is through the Internet | | | | quicker and more effectual. |
| stock market sites. | | | | Electronic trading also provides the investor with |
| Exchange Floor Trading | | | | expedited confirmations. Investors have the benefit |
| The exchange floor, although not exactly as | | | | of monitoring the investments through the Internet. |
| portrayed in the movies, has thousands of brokers | | | | Brokers still complete the trades however, as online |
| who negotiate trades for their clients, the investors. | | | | stock markets are not directly accessible by |
| There is a procedure that is followed by the brokers | | | | investors. |
| for uncomplicated trades. The investor contacts a | | | | The only part of the process an investor usually is |
| broker's office and places an order for a specified | | | | involved in is their contact with their broker and |
| amount of stocks in a certain company. The broker's | | | | receipt of regular reports. The remainder of the |
| order department then provides the order | | | | trading mechanism is carried out without any direct |
| information to a floor clerk located on the exchange | | | | interaction from the investor. |
| floor. The clerk relays the information to the floor | | | | The theory behind stock trading is actually quite |
| traders. The floor traders meet with other traders | | | | simple. Investors purchase shares in businesses |
| who have investors with shares that they are willing | | | | through stocks in order that those businesses can |
| to sell in the requested companies. Once both parties' | | | | continue operations. The investors earn a share of |
| traders have agreed upon the price they close the | | | | the business's earnings in return. It is a process that |
| deal. The final details are provided by the reverse | | | | benefits both parties. |