What Happens In A Stock Exchange?

Those that have watched the financial news or have read the financial section in any newspaper are aware that stock Exchange is something that many people watch closely. The stock exchange in the simplest of terms is the place in which people gather together and they buy and sell shares of the company that they are interested in. It is basically where the stock market is taking place, inside of this building. With that being said, some people still wonder just what is going on inside of these buildings? Anyone who has seen movies in which there are tons of people out there who are portraying the stock exchange are going to find that they think of the stock exchange as a place in which people are yelling and screaming at the top of their lungs, holding up their hands above one another to get the number of stocks that they are wanting. They may run around talking on phones and frantically following the boards that are posting new prices and so forth. Is this really how the process works?

The Stock Market

It is something like this, however, it has become a bit more organized thanks to the computers that are now able to keep the information intact and more organized than it was years ago. When a person decides that they want one hundred stocks of a company, they simply tell their broker. The broker then calls the floor person, which is the person that is out there with the rest of the world, wearing those jackets and making demands of how much they want. The floor person will claim the one hundred stocks that the buyer wants with everyone else. The broker then can find out if the one hundred stocks have been purchased, and they simply get back with the buyer to let them know that they have found success. The process of buying is usually completed when you know that you are getting the lowest price that is possible for the stock. You will then want to sell this when it reaches the highest price possible so that you do make some income from the process.

During some trades, the process is done face-to-face without all the commotion that is found on the floor. This is the method that most people prefer since it is less competitive and people can come to an agreement on what they want to happen with their stocks and the company. However, when a company starts a public trading, the idea of private negotiations is tossed out of the window since it is a game that anyone and everyone can get in on. This is why public stock offerings are such a big deal when they do occur.

Though there are tons of technology that is involved with the process of working on the stock exchange, the person is going to find that the humans that are working on the floor are one of the main components that are making these deals go through.