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Function of Trading

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Function of Trading

Do you want to trade in shares? Well if that is so, then you should do the same through Transfer agent or registered stockbrokers. If you are a buyer, then your first step involves in getting in touch with the broker. Next, you need to share all the information of the shares that is needed for the purchase. Soon after this, the broker comes up with a deal. In addition to this, you will also receive share certificate as well as the transfer form. After the deduction is made, the buyer will get hold of the final documents. The seller on the other hand also contacts the broker and provides him all the needed details together with the transfer forms and share certificates. Once the deal is cracked, the broker gets hold of the payment and his commission is deducted from the same. Each and every stock exchange comes up with its very own permitted and listed securities which are traded on their floor.

What Floor Trading Exactly is?

In addition to OTC and NSC, you will find that trading also takes place through open outcry system. More specifically, the transaction takes plan on the exchange trading floor at the peak trading hours. There are various notional trading pots for various securities. At this very hour, you will find that the seller as well as buyer will get in touch with each other. Both these sellers as well as buyers are considered to be authorized agents as well as brokers. They are at times also referred to as shareholders. While the buyers ensure to make the bids, the sellers are no less and present their offers. However, the bargains are usually closed at prices that are mutually agreed on. The jobber too plays an integral part when it comes to trading. In simple words, it can be rightly said that floor trading is an ideal platform wherein the seller as well as the buyer execute the transactions in a face to face manner.

Screen based Trading: If you are into a screen based system, then you will know that in recent types these types of systems are being replaced through computer screen. Over and above, you will also find that the distant participants will be able to trade with one another via the computer network. An increasing number of participants from round the corner of the world can execute the trade transactions irrespective of their locations. These trading systems are categorized under two categories namely:

  • Quote Driven System
  • Order Driven System

Under the former system, you will notice that the market will make two way input quotes in the system. In addition to, the market players contact the market makers through telephone. Finally they come up with a negotiable deal. Under the latter system, the client places his order with a broker which is next fed into the system.

So, whether you are a buyer or seller, make sure to contact a reliable broker and crack a good deal in the process.

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  • Stock Exchange

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