How does the stock market work?
Basic stock market operation for beginners:
Here is how people buy and trade stocks:
Every stock is traded on a public market. There are several exchanges
around the world, such as the New York Stock Exchange, NASDAQ, or the Shanghai Stock Exchange. These exchanges operate in the local time zone of the location. So, the US market will be open during the US day, the Shanghai market is open during the Chinese day (because this is on the other side of the world). More information on market hours can be found here.
Basic market operation:
When you price a stock on the market it gives the offer price (what someone is willing to sell for).
You can set your own bid (usually good for a day) by selecting to buy at a limit (the price the stock has to hit to execute the order). If you want to offer a stock for a price, you can set a limit on the minimum you will take and the system will automatically execute the order. Additionally, orders can be specified all or none, where you have to get all shares or none - if not specified shares may be filled at prices other than the limit price set (but this is unlikely for non-institutional investors).
Quick basic reference for markets
Other market basics
Article by Jacob K Lloyd
Published: 2 July 2015
Last updated: 13 Sep 2015
Starting With Stocks
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