Trading Online

The traditional way of trading takes place on the stock market exchange floor. In this case you call your broker when the markets are open and tell him which stock you want to buy and how many shares you want to buy.

Your broker takes that information and sends it to the exchange floor to the floor clerk. He then gives the order to a trader and tells the trader to find another trader who wants to sell that many shares on the market.

The trader runs around yelling Buy stock XYZ and tries to locate a seller. The trade finally closes when the trader who is buying and trader who is selling come to an agreed upon price. One the trade is filled your broker notifies you that your order has been filled and at what price it has been filled at. Finally you also get a confirmation letter in the mail a few days later.

This way is complex and takes a long time to fill. The more modern way of accomplishing this is by trading online.

When you trade online you simply place your order on your section of your broker’s website. Your order is then send to a massive exchange computer where it is filled instantly. Because it is filled instantly this way is much more efficient and gives you more say so on the price you get filled at.