A Guide To Options Trading

The exchange of stocks between two willing buyers and sellers is called options trading. Stock markets are places where the trading of stocks can be done conveniently by shareholders or their brokers. You can trade the shares either in a brick-and-mortar stock exchange, or visit a more quiet and sophisticated virtual one. While the former resembles a chaotic marketplace, the latter is a relatively calmer place, consisting of a network of computers which manages the ever-fluctuating market electronically.

There are two types of markets where stocks are traded. First is the primary market, where stocks are created, and the second is the secondary market, comprising investors who trade in previously issued shares without the interference of the companies who run them. In any case, the companies do not play any part where trading of the shares are concerned.

Founded in 1792, the New York Stock Exchange is the most renowned exchange in the world. It boasts of prestigious names like Citigroup, Coca-Cola, Gillette and similar large players in America. It is one of the first places where trade was accomplished in person. In this listed exchange, orders flow in via brokerage firms and go up to floor brokers who then trade the stocks. After the deal is made, the details of the agreement is returned to the firm, who is responsible to inform the individual about the day’s proceedings.

NASDAQ is another popular exchange, where the trading is done using computers. Companies like Microsoft, Cisco and Intel patronize this place, making it a tough competitor of the NYSE. The American Stock Exchange is the third largest trading house of share in America. Earlier it used to play second only to the New York Stock Exchange, but the position is now occupied by NASDAQ, pushing AMEX to the third place. The trading done here is in small–cap stocks and derivatives.

Stock exchanges can now be found in almost every corner of the globe, showing the popularity and success of stocks and options trading.

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