How Are Stocks Bought
and Sold

    Stocks are bought and sold when a company initiates a initial public offering (IPO).  This IPO is a distribution of newly issued stock, normally based on a documents outlying company details, which is also known as a prospectus.

   Investment bankers and brokerage houses purchase large quantities of these stocks from these companies to then sell to individual investors.  This arena for stocks being bought and sold is called the Primary Market.  Trading in the Primary Market allows the company to receive capital from the selling of their stocks.

   The stocks that are left over after an IPO are now available to be sold to investors.  This arena is called the Secondary Market.  This is how stocks are  bought and sold allowing the profits to stay within the brokerage houses or investment banks.  The companies that sold the stock to the brokerage houses and investment banks do not receive any capital from these types of sales.

   The Secondary Market is where the stocks are bought and sold generally with out the brokerage houses or investment bankers.  This happens over the counter or through one of the exchanges.  Generally stock is bought through a brokerage account though.  Once a buy order has been initiated they will go through an exchange such as the NYSE or New York Stock Exchange, the world’s largest exchange, to purchase the stocks.

   There is also the ability for stocks to be bought or sold in an Over -the-counter (OTC) market.  In this forum the stocks are bought and sold solely between the broker and the buyers.  You will find that fairly new companies, start up companies and those companies that can not get listed on the exchanges, will be listed on the OTC markets.  The NASDAQ, an electronic trading system, provides an avenue for traders to be kept abreast of stocks being bought and sold on the OTC.

  When stocks are bought and sold by investors it’s based on the seller getting the right selling price from a buyer.  Normally the stock is still handled by a broker for the transaction of the trade/sale.  Once a sale has taken place there is generally a commission or some type of fee being charged from the brokerage or investment bank.

   Once the stocks have been traded the stock certificates are transferred from the previous owner to the new owner, because the stocks are negotiable.  These stock certificates are normally held in the brokerage firms name or street name, allowing for the convenience of transfers from one owner to the next.  If they did not do this, each owner would have to sign each certificate for every stock that was bought or sold.  This is a simplistic way of showing how stocks are bought and sold today in the investment world.

   Happy Trading!!!!!

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The Skinny on

Stock Trading Signals

   Sitting at a red light one afternoon, I happened to be listening to NPR, giving the evening report on Wall Street.  The light changed and my mind went to thoughts of stocks.  The comment was made on stock market signals and everything seemed to become blah, blah, blah about stock ups and downs.  I got curious.  So I decided to look up stock trading signals.  Here’s what I learned.

  Stock trading signals seemed fairly simple to understand at first glance.  I would’ve never thought that was the case.  With all the many stocks and various companies around, stock trading signals as a definition, are the recommendations to buy and sell stock.  This is really where the simplicity seems to stop, at least for me.

  There are numerous companies around who boast the best at stock trading signals.  There are those who state that they are the leaders in the industry with cutting edge technology.  Providing the most profitable outcomes for your benefit.

  Many use the latest scientific methods available to them.  Others use factors such as politics, commerce and supply of currencies.  As well as those with chart patterns based on in-depth analysis.  For the most part traders use a series of numbers and apply them to stocks.  Now I’m not a mathematician at all so how they do this precisely, I’m not sure.  But based on a few things that I’ve read they like to apply Fibonacci studies, whomever he is or was, to their trading formulas.

  All the methods of stock trading signals are for helping you, as the trader, know when the opportune time is to buy your stock at the lowest possible price or to sell your stock at the highest possible rate per share.

  For the most part stock trading signals seemed to be used by the more experienced traders, with plenty of years and clientele under their belts.  There are a few sites that boast of the ability to allow you to learn from the masters.  They state that they will provide the secrets to understanding the stock trading signals.  There are a couple that promise to provide a formula so simple you’ll always make money.  That all the stock trading signals will line up and be green for a go.  There are testimonials on the sites of the many people who have accomplished amassing great wealth from following these secrets.  Other sites offer one on one coaching from again, an experienced trader.  Someone who has been in the business of stock trading signals, someone who has made lots of money for many famous people.

  All in all whichever way you choose to go, keep in mind almost all of them have some kind of fee.  Learning to understand stock trading signals is a process and unless done right could become costly.  As with everything that includes risk, move with caution.  As for me, I’m going to probably just stick to traffic signals and NPR for right now.  Those stock trading signals, are still a work in progress.

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