StockBoughtAndSold - HOW A STOCK IS BOUGHT AND SOLD T he...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
HOW A STOCK IS BOUGHT AND SOLD T he following chart is a detailed explanation of how a stock is traded. It illustrates how one transac- tion looks from three different perspectives – the buyer, seller, and the stock market professionals who execute the trade. 1. Roger Smith of Des Moines, Iowa, decides to invest in the stock market. 2. Roger consults a broker who is a member of the New York Stock Exchange. They discuss a num- ber of possible long-term investments. Roger asks his broker for a quote – the highest bid (to buy) and the lowest offer (to sell) for a stock at any given time – on Gap Stores stock (GPS). 3. The brokers access an electronic market data system to obtain quotes on (GPS) Gap Stores stock from the NYSE floor. A number of information vendors offer this service to brokerage houses. The information vendors get quotes from the NYSE systems via direct high-speed lines. 4.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Ask a homework question - tutors are online