Basics of stocks: How stocks trade
After knowing what are stocks lets look at how stocks are traded. When we say trade, we are referring to the process of buying and selling stocks.
Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price.Some exchanges are physical locations where transactions are carried out on a trading floor and others are virtual, where trades are done electronically through a network of computers. The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery.In Malaysia, the stock exchange is known as Bursa Malaysia where the stocks are traded electronically.
Obviously, electronic trading is far more efficient and faster. If you wish to learn more about stock exchanges visit Wikipedia.
Now, since we are discussing in a Malaysian perspective, lets narrow down on how to trade stocks in Malaysia. Below is a screen shot from Bursa Malaysia’s website on how to buy and sell stocks.
The step by step guide on this is available at:
But before visiting the above sites please learn more about the Central Depository System(CDS)(click this link) because it is the first step to do if you are new to stock trading.
A list of stock broking companies in Malaysia is also provided by Bursa Malaysia. If you wish to browse the list click here.
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