How Stock Market Works?

In order to invest in shares through stock market, an investor needs to understand how a stock market works. The first thing to understand is "Broker". Any investor who whats to buy or sell shares in the stock market needs to place orders with a broker. There are many financial institutions and banks that act as broker for small percentage of fee. This fee or brokerage charge can be between .10% to 1.0% of the transaction amount.

How Stock Market Works
When an investor places a BUY or SELL order with his broker, the broker forwards the order to the stock exchange through his system. The order stays in the queue in the system of the stock exchange and gets executed when the order logs on to the system within the specified BUY of SELL limit price.

The shares thus purchased are sent to the purchaser either in physical form or demat format.

This is how stock market works.

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