How does a stock market work?
First, you need to understand that a stock market an auction where buyers and sellers meet and negotiate for the sale of a stock. Because the stock market is an auction, a stock does not have a fixed price but the value changes every time a sale is made! Second, with the advent of the computer, the nature of how stocks are sold has changed drastically. Now with a “Day Trader” account from a major brokerage firm, you can sit in your own home and buy or sell stocks on any stock exchange in the world. Now, lets take a look at a typical stock sale for the purchase of a share of stock. 1. An investor will need to either visit a stock broker (a person who buys and sells stock) or use their internet connection to the stock market . 2. Once the investor has met or talked with the the broker, the broker will then record information about how many share the investor wants to buy and, in the investor wishes, the maximum price the investor is willing to pay. The broker will then enter the informat
