Best Stock Market Advice

The stock market is the most important source of capital for companies. It is the place where stock prices are agree. Every day you will listen to the financial news and get the latest stock market information. It is very common to hear that the Dow Jones Industrial Average reached new highs or new lows for the day

Since the stock market has become one of the most important tools in our economy, our retirement or even our saved money, it is important to understand how it works. In an economy in which the stock market is considered an economic tool and measurement of the general economy health, a stock market that is growing is associated with increased business activity, investments and development.

Stock Prices

Most stock market investors rarely have questioned themselves, what is the stock market? The stock market is the place where most companies stocks are traded at a specifically stock price. Not only it now involves stock trading, now it also involves the companies stock derivatives and securities listed in the stock exchange. In the United State the stock market includes all stock trading of stocks listed in major stock exchanges such as NYSE, AMEX, NASDAQ and many other regional stock exchanges.

The stock and bond markets have changed significantly because of advances in technology. The widespread use of personal computers, and, more specifically, the Internet has given investors direct access to information that was previously unavailable. In addition, daily trading hours for investors have been lengthened. Whereas the stock markets were once open for trading only during specific hours, after-hours trading now takes place. The exchange still close at the end of the official trading day (4:30 p.m., Eastern U.S. time); after hours trades transpire via electronic computer networks (ECNS) before the market opens at 9:30 a.m. Eastern U.S. time and after 4:30 P.M.

Trades on the NYSE are matched by specialists on the floor through open-outcry auction, but the NYSE is moving toward allowing widespread automatic matching of buy and sell orders like its rival Nasdaq.

One of the many advantages for investors using the Internet is that they can trade securities online without a broker. Another advantage of the Internet is greater stock-pricing transparency. In other words, you can see the price that buyers and sellers are willing to settle on for a particular stock, The bond markets still have a long way to go in marking their prices transparent to potential buyers.

Transaction costs have decreased with the switch to decimalization. This switch has had the effect of narrowing the lowest bid-and-ask spread from 1/6 point ($0.06) to the minimum of $ 0.01 per share.

The stock market used to be a place for elite traders, big families but over the last decade with the advance of the internet its participant base has increased from small invdividual investors to big hedge fund stock traders. Every stock trade is done by the stock auction model. Stock buyers will place a bid at a specific stock price and the stock seller will place the ask at a specific stock price. When both, the bid and the ask, stock prices match the stock trade is executed at the stock exchanges.