How to Match Buyers and Sellers on the NYSE Stock Market
A stock market, stock exchange, or mutual-stock exchange is an aggregate group of buyers and sellers of shares, representing ownership interests in companies; these can include publicly traded securities on a securities exchange. The ownership interests of investors in a company are reflected by stock shares; such that when one person purchases a stock from another, a “credit” is granted by the owner in the form of stock ownership. The prices of shares will vary over time because new shareholders add to and reduce the supply of these shares. This affects the prices of shares purchased by all shareholders, since some companies have more active buyers than others. The price of a share is typically determined by supply and demand, the financial abilities of the company that issues the stock, and factors such as the financial health of the company and overall market sentiment.
There are two types of exchanges that deal with the trading of shares; namely, centralized exchanges and non centrally controlled exchanges. A central exchange is controlled by a large group of buyers and sellers, acting as a clearinghouse. Because there are fewer buyers and sellers to affect the price of shares, this tends to result in less volatility. The liquidity of a share is also determined by supply and demand, with greater liquidity occurring during times of financial duress and high share volume. Non centralized stock markets tend to be more volatile and do not occur regularly. They do however, have greater flexibility for smaller investors.
The Dow Jones Industrial Average, or DJIA, is a leading indicator of the overall value of the stock market. The DJIA reflects only the stocks of major corporations; it does not include many of the smaller companies that make up many of the world’s largest companies. As such, the DJIA is not used to indicate value and is not considered a leading indicator. It is however, commonly used as a technical analysis tool.
Dividend Reinvestment Schemes, or DRS, are dividend paying stocks usually issued by publicly traded corporations. Investors who purchase shares in a company that issues Dividends Reinvestment Schemes are allowed to accumulate dividends over time. The dividend is then paid to investors on an ongoing basis, either in cash or in the form of dividends as a stock option. If a company continues to pay dividends each year, the profits can be reinvested in additional shares of stock, further increasing the value of the portfolio. For this reason, Dividend Reinvestment Schemes are ideal for longer term investors.
Another important way to match buyers and sellers on the stock market is through automated matching services. Automated matching services identify buying opportunities in the market and notify buyers and sellers, both of whom can then respond to requests for more information. Many brokerages offer automatic matching services that may match buyers with sellers as often as daily or weekly. This convenient service allows buyers to receive alerts and news about current deals and helps to manage their investments.
Some of the most highly traded STocks on the New York Stock Exchange include dow Jones, Microsoft, General Electric, Wal-mart, AIG, and Wells Fargo. Dow Jones Industrial Averages, Microsoft, and GE are some of the largest companies in the stock market today. Wal-mart is one of the largest retail stores in the world, and has locations in key cities around the United States. Wells Fargo is a bank that is located in the United States, and is one of the most widely recognized banks in the world. Because of their vast experience in financial services, having a trusted broker is essential for investors who want to maximize their returns.
