The Stock Market Basics

Thousands of people that have money in any sort of account for their retirement can consider ourselves collaborating in the stock market. But have you contemplated about the functionality of how this fascinating market works? Imagine being at a regular auction, where instead of nice bits like autos and antiques are being bid away, think about bits of public corporations being auctioned away. To make a less confusing analogy, consider the role of an auctioneer. The auctioneer’s role is to get the highest and best price for each product.

Well, the stock market basics around the planet kinda operate in the same fashion. The auctioneer role, is known as a Market Maker. In a stock sale, there is not any stable, set price for stocks, but instead, setting the price is the task of the Market Maker.

Stock Trading

The price will change significantly, as the ups and downs of the stock market, the buyers and sellers, will bid on either the stock going lower, or higher. Typically when you see a share price go up, it implies the buy cost of a stock has increased. This is vice versa when a stock declines in value. Now I’m sure you have seen visuals on the major reports networks of how a stock floor looks. You know, the floor where tons of sheer raving nutty people, scream numbers and take a look at monitors and make trades all day. The trading day starts at 9:30 in the morning Eastern Time, and stops at four hundred in the afternoon Easter Time. Depending on business stories, market forecasts, world events, and some other stuff thrown between, can dictate how much volume a market can have in a day. The New York Stock Exchange is the most popular market in the worked but the NASDAQ is a very good market exchange. Now what makes NASDAQ quite unique from the other stock exchanges, is this stock market is controlled by computers.

Regardless of the technical advances of this market, NASDAQ still has the typical bidding water of NYSE and American Stock Exchange. The buyers and sellers have their own areas to sell and buy stock, and bid thru a quote system called Level II. The brilliant thing with stock trading, is that to become successful with trading stocks, you don’t need to be in the pit, bidding like a loony on the hunt for their lives. Not at all! You can now use the awfully PC in your place, or go to a trading office if you live in a large town and trade stocks. Many alternative net based brokerages are out there, and have lots of materials to get you started on the way to turning into a great stock trader!