Executing A Trade At The Stock ExchangeWhen carrying out a trade on the stock exchange, most are accomplished through a brokerage firm. Individuals and organizations that wish to purchase securities will call upon the brokerage firm to execute their transaction. In an example of a trade, an investor wanting to buy 200 shares of ABC Corp stock will telephone or e-mail the order to a brokerage firm. This communication is normally made to a stockbroker. The investor might desire to buy the shares at the market, or current price. However, the investor may choose to pay no more than a set amount per share. The brokerage firm then contacts one of it's brokers at the stock exchange to purchase the order. For this service, the investor will pay the original broker a commission, either as a flat fee or as a percentage of the purchase price. The price of a stock depends upon the market forces of supply and demand. With companies issuing only a limited number of shares, price is determined by demand. An increase in demand will raise the price whereas a decrease in demand will lower the price. Generally the demand for a particular stock depends upon expectations relating to the profits of the corporation that issued the stock. The more optimistic these expectations are, the greater the demand will be and, therefore, the higher the price of the stock. Would you like to learn more about trading? You would? Great! Then please click here for an excellent
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