Stock exchanges and brokers

Where shares are bought and sold, and who places the order for you.

Click any Tap any word with a dotted underline to see what it means.

A stock exchange is a marketplace where buyers and sellers trade shares. In the U.S., the two main ones are the New York Stock Exchange (NYSE), whose history goes back to 1792, and Nasdaq, which opened in 1971 as the first electronic stock market. In Brazil, shares trade on B3, in São Paulo.

What a broker does

Individuals don't trade on an exchange directly. They open an account with a broker, a company authorized to send orders to the market and to hold the shares in their name. Exchanges and brokers are supervised by regulators: the SEC in the U.S. and the CVM in Brazil. When you buy a share, you usually buy it from another investor, not from the company itself.

How an order works

• Market order: buy or sell right away, at the best price available at that moment.
• Limit order: buy or sell only at a price you choose or better. If the market never reaches that price, nothing happens.
• Bid and ask: at any moment there is a highest price someone will pay (the bid) and a lowest price someone will accept (the ask). A trade happens when the two meet.

When the market is open

Regular trading on the NYSE and Nasdaq runs from 9:30 a.m. to 4:00 p.m. New York time, Monday to Friday, except holidays. Some brokers also allow trading before and after these hours, when fewer people trade and prices can jump more.