the stock market

Source- Stock Market. Febuary 23, 2008. http/:en.wikipedia.org/wiki/stock_market


Trading

trading is done by an auction market. Which means a potential buyer asks to buy a stock at a specific price from a potential seller. Once they both settle on a price an exchange is then made. Buying and selling generally is done on a floor or on the computer. Buying an selling on the floor is done by outcry ( screamning out an offer or a price.) and that's how trades are made on the floor. On computer stocks are traded and bought using the internet, it's pretty simple.

"The New York Stock Exchange is a physical exchange, also referred to as a listed exchange — only stocks listed with the exchange may be traded. Orders enter by way of exchange members and flow down to a specialist, who goes to the floor trading post to trade stock. The specialist's job is to match buy and sell orders using open outcry. If a spread exists, no trade immediately takes place--in this case the specialist should use his/her own resources (money or stock) to close the difference after his/her judged time. Once a trade has been made the details are reported on the "tape" and sent back to the brokerage firm, which then notifies the investor who placed the order. Although there is a significant amount of human contact in this process, computers play an important role, especially for so-called "program trading"."

"The NASDAQ is a virtual listed exchange, where all of the trading is done over a computer network. The process is similar to the New York Stock Exchange. However, buyers and sellers are electronically matched. One or more NASDAQ market makers will always provide a bid and ask price at which they will always purchase or sell 'their' stock."

These are the two main stock exchanges that Americans buy, sell, and trade stocks in. As you can see, the New York Stock Exchange is done more of an old- fashoin style and The NASDAQ is just all on computers.

The Stock Markets Importance

The stock market is extremely useful because it gives companies ways to raise money to make capital, and give business's to go public and make lots of money. The Stock Market usually represents how the economy is going also, and how much the normal household has.

One really attractive reason to invest in stocks is you can quickly get rid of anything you don't want to invest in anymore, unlike other investment options like real-estate.