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noob! question about stockbrokers

  • 14-09-2007 10:37pm
    #1
    Cunning
    Closed Accounts Posts: 80 ✭✭


    this may be common knowlege to some of you, enlighten me please!! :)

    the question is this.
    i ring up mr. stockbroker and say "i want you to buy for me, 1000 shares in company x."
    where does he buy them from
    --does he.......

    *access some large database of buyers and sellers and buy them there

    *buy them from mr.B who has phoned him saying "i want to sell 1000 shares in company x."

    *or.. do brokers keep a certain number of the most traded shares in their own name, so that when you buy, you buy direct from them [at their price]?


    +when i look up aertel for the share prices, where is the market place [my father told me he once put in an order to buy shares if they went as low as €10 say, indeed that day the stockbroker says, yes i got you thoose for ten euro, even though the "market price" never went below €10.10.

    thanks for your time!!
    when i make my second billion i'll remember you!


Comments

  • #2
    A Random Walk
    Closed Accounts Posts: 346 ✭✭A Random Walk


    Usually they will be bought through a stock exchange. Sellers will be selling their shares for a price, you will be trying to buy for a price and when they match an exchange is made. You might hear about the "spread" which is the difference between the price buyers are offering and what sellers are willing to sell for, on very lightly traded shares the spread can be quite large (and a hidden cost).


  • #3
    failsafe
    Registered Users, Registered Users 2 Posts: 569 ✭✭✭failsafe


    In a way, your first guess is the most correct. The large database is the stock market. The stockbroker visits the market and buys these stocks on your behalf. Companies visit the stock market to sell shares in their company.

    Imagine a fruit market where you give your fruit picker €100 and tell him to buy melons, he goes to the market for you and depending on the harvest that day, and the general love of/demand for melons, a certain price is set in the market. It's a similar principle, only it's done on computers, with stock brokers matching melons they have to sell and melons they want to buy with those of other stock brokers, melon companies and individual melon enthusiasts through the medium ("exchange") on wall street!!

    (In case you couldn't tell.... I'm really in the mood for some melon)


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