Money Talks News: Understanding Stock Exchanges

Money Talks News: Understanding Stock Exchanges

(Money Talks News) - While millions of Americans invest in stocks in their 401Ks or other accounts, millions of other people do not. One of the reasons people aren't investing is because they don't understand how they work, so they feel uncomfortable putting their hard-earned money in them.

"I've been down here 33 years, and I have to say that I've loved every day that I've worked down here. The bad days and the good days, I just love working here. I look forward to going to work every day," said Peter Costa, a floor broker at the New York Stock Exchange.

Since stocks are an important part of your savings – or at least they should be – you need to understand what's happening here.

Think of it as buying a house. Rather than doing alone, most people use agents. In return, those agents get you the best price when you want to buy or sell property.

That's basically what you're seeing here: Brokers help buyers and sellers get the best price they can. Instead of houses, though, they're doing it with shares of stock, which is nothing more than slices of American companies.

"If you put in an order to buy 100 shares of Visa, for instance, the order will come and get routed to my hand-held, which the exchange has supplied us, it's a tablet computer, and what I'll do is I'll come out to the stock and buy 100 shares of Visa," said Costa.

So, the next time you see the exchange floor, remember, this is just people. People who are trying to help you own slices of American companies. Because over time, although they're risky, they can make you richer.

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