Business and Finance Mr. I

Unit 1- What is the Stock Market The Stock Market exchange is a marketplace of publicly traded companies. Example of exchanges are, NASDAQ, New York Stock Exchange, London Stock Exchange, Shanghai Stock Exchange etc… People can buy and sell shares in a company that they want.

Buying and Selling Shares Individuals cannot buy shares on their own, they have to go through a floor broker, who has to go to the floor trading post specialist for that stock to trade the order. The specialist uses a method called open outcry, which is a bidding method. The specialist matches open buy order with open sell orders and then reports them to the tape. If a spread exists (difference between current price and the price the person wants to pay) then nothing occurs until it reaches the correct amount.

Electronic Trading In the modern day, lots of trading is conducted by electronic traders and computers. Computers have for the most part replaced the floor trading post specialist. This has advantages like increased liquidity in the market, which is more shares for sale. There is also a disadvantage because many people believe the game is “rigged” and controlled by people called high speed traders who can cause stock prices to crash and spike using mathematical algorithms.