Stock Market. How Do Stock Markets Work? Step 1:A client places an order with a broker at an exchange by phone, Internet or in person.

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Presentation transcript:

Stock Market

How Do Stock Markets Work? Step 1:A client places an order with a broker at an exchange by phone, Internet or in person

How Do Stock Markets Work? Step 2: Orders are matched electronically. The bid is the highest price a buyer is willing to pay and the ask is the lowest price a seller is willing to accept for his or her stock. When buyers and sellers match, it means they agree on a price and a trade is made

BuyerBid PriceSellerAsk price A$99E102 B$100F103 C$102G104

How Do Stock Markets Work? Step 3: When a match is found, the broker informs the client of the trade price.

BuyerBid PriceSellerAsk Price A100H130 B102I120 C99J110 D88K100 E89L99 F95M101 G N140