Stock trading is done by a wide range of investors and this line of investing consists of individual stock investors, stock trading companies, and all the individuals and companies used to recruit professionals who carry out the trading on behalf of the recruiters.
The term stock means shares. Different companies sell a part of their shares in the stock market and the buyers purchase these shares and becomes a partner in the company’s profit. This profit making is the main purpose behind buying and selling of stocks. There is another form of investment and profit making which is known as a bond.
The stocks and bond market are different, but they are jointly known as the securities market. Stock exchanges are the places where the stock trading takes place. These places are designed to bring the stock sellers and the stock buyers onto the same platform and boost the business of stock trading.
There are different types of stock exchanges like a physical type, a virtual type, etc., and stock trading follows different methods depending upon the market type.
In the physical location, the stock is done through a method which is known as ‘open outcry’. The trading in this type of exchange is done on the trading floor, and the traders put forward the bids and offers verbally. This method is the traditional method of stock trading, but it is becoming outdated in the modern market.
Virtual stock exchanges are much more sophisticated than the traditional physical one. These exchanges use modern technology like computers and other gadgets to carry out the trading. Instead of crying loudly and putting forward rates and offers, the traders in virtual exchange use their computer terminals and the trading is done electronically.
Stock trading is like an auction market. In the auction market there are several sellers and at the same time, there are several buyers. The buyer asks a price for the commodity and the seller quotes a price to buy the commodity. When the seller’s price and the buyer’s price match each other, the deal is confirmed. In the stock exchanges, this kind of selling and buying exists and is done on an early-bird basis.