TRADING HISTORY
OF THE STOCK IMPORTANCE OF THE STOCK
BEHAVIOR OF THE STOCK STOCK EXCHANGE ROLE OF STOCK EXCHANGE
AMERICAN STOCK EXCHANGE AUSTRALIA ST EXCHANGE
LONDON STOCK EXCHANGE BOMBAY STOCK EXCHANGE
KUWAIT STOCK EXCHANGE NYSE HONG KONG STOCK EXCHANGE
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Participants in the stock market range from small
individual stock investors to large hedge fund traders, who can be based
anywhere. Their orders usually end up with a professional at a stock
exchange, who executes the order.
Some exchanges are physical locations where transactions are carried out on
a trading floor, by a method known as open outcry. This type of auction is
used in stock exchanges and commodity exchanges where traders may enter
"verbal" bids and offers simultaneously. The other type of exchange is a
virtual kind, composed of a network of computers where trades are made
electronically via traders at computer terminals.
Actual trades are based on an auction market paradigm where a potential
buyer bids a specific price for a stock and a potential seller asks a
specific price for the stock. (Buying or selling at market means you will
accept any bid price or ask price for the stock.) When the bid and ask
prices match, a sale takes place on a first come first served basis if there
are multiple bidders or askers at a given price.
The purpose of a stock exchange is to facilitate the exchange of securities
between buyers and sellers, thus providing a marketplace (virtual or real).
The exchanges provide real-time trading information on the listed
securities, facilitating price discovery.
The New York Stock Exchange is a physical exchange, where much of the
trading is done face-to-face on a trading floor. This is also referred to as
a "listed" exchange (because only stocks listed with the exchange may be
traded). Orders enter by way of brokerage firms that are members of the
exchange and flow down to floor brokers who go to a specific spot on the
floor where the stock trades. At this location, known as the trading post.
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