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| Tips On Trading In NASDAQ |
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| Written by John Border |
| Saturday, 07 February 2009 11:58 |
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NASDAQ is relatively young but has been giving NYSE a run for its money. NASDAQ operates very differently than the NYSE as it works on a method called the double auction method. In this method the highest bidder competes with all the bidders on a buy and same goes for a sell. In NASDAQ much like in the real world each broker or the dealer as you may want to call it has an inventory of shares which they are willing to sell and that means that they can easily assume that their inventory along with other broker's inventory will be taken care of. In effect each order if fulfilled based on how much inventory or shares you are holding. Now there are two types of orders market order and limit order. Let us say that you have a limit order which means that you are neither willing to buy above that set limit nor willing to sell below that price. Market order means that you are saying that at whatever price the dealer is holding the inventory the system should go ahead an buy that. So what happens when the dealer only has 500 shares and you place an order for buying 1000 shares at market price? For the fulfillment of this order you will get 500 shares of the order at the stated price and another 500 shares at the price the dealer says it got somebody to sell the shares to you. Now this price may be higher or below the price at which you got the initial 500 shares. Market makers is the term used in NASDAQ. Market maker is a person who sells and buys shares and they keep on postinmg both bid and ask prices. You can also have access to these bid offers via a system called the SOES which is Small Order Execution System As small investors NASDAQ is the one which provides a very option for trading apart from American Stock Exchange. The there is OTCBB which trades in only penny stocks, but trading on OTCBB can be very very expensive and very volatile. About the Author: beginners guide stock market is important for knowledge of how does the stock market work Get a totally unique version of this article from our article submission service Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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