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Author
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xkekg34fa
Posted: Fri 20:52, 30 Aug 2013
Post subject: hollister france An Introduction To Nasdaq
NASDAQ is relatively young but has been giving NYSE a run for its money. NASDAQ operates very differently than the NYSE as it works on a method called the double auction method. In this method the highest
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bidder competes with all the
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bidders on
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a buy and same goes for a sell.
As it happens in real world the borker or the dealer is assumed to have some shares as well as some cash. So
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when the order comes up for fulfillment each broker is assumed to have an inventory which will need to be cleared at various prices. This
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is
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similar in the real world when you need to buy something you visit a shop .
As an example I will show how a limit order works and how a market order works. Limit means that you impose a limit on the price you are willing to pay for the stock. In the market order you are willing to pay any price which is currently in the market. For example if you need to buy 1000 shares then the dealer will give 500 shares at a price you quoted but the next 500 shares you will get at
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a price which can be
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anything based on the price the dealer procures the additional shares for you.
Market makers is the term used in NASDAQ. Market maker is a person who sells
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and buys shares and they keep on postinmg both bid
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and ask prices. You can also have access to these bid offers via a system called the SOES which is Small Order Execution System
In conclusion, NASDAQ seems to favor the small investor like you and me for trading and that is all that matters in the stock trading arena.However
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there are other exchnages which can help really really small investor with special deals and cash only
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options like the American Exchange.
The there is OTCBB which trades in only penny stocks, but trading on OTCBB can be very very expensive and very volatile.
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