Stock Market

How Stocks Trade

The most common place where stocks are traded are exchanges. Exchanges are dedicated places where buyers and shareholders can meet and make price offers on stocks they are interested in buying or selling. These exchanges are sometimes physical locations where transactions happen on a trading floor while others are virtual where a network of computers assists in an electronic transaction.

The sole purpose of a stock market is for people to be able to do stock trading with the safety and security provided by the stock market while the transaction is underway. It is thus reducing the risks of investing and generally makes way easier for anyone to be able to sell shares and find the right buyers. It’s basically what one would call a more advanced market for shareholders.

There are of course two different categories of markets and those are separated into the primary market and the secondary market. The primary is where the security for the trading is created whereas the secondary is where investors are able to trade their securities that were issued in the past without having to involve issuing-companies in the trade. The secondary market is what people mostly talk about when it comes to stock market trading. It should be noted of course that when a stock is traded, the company the stock’s come from is not directly included in the trade in any way.

One of the most prestigious exchanges worldwide is the very famous New York Stock Exchange (NYSE) where the “Big Board” was founded about two hundred years ago in 1792 after the signing of the Buttonwood Agreement by twenty four NYC stockbrokers and other shareholders. The NYSE is now host to stockbrokers and shareholders from various big-time companies like Coca-Cola, Gilette and Wal-mart. It is even up to today host to many stock transactions daily.