How does trading happen?
An investor decides to purchase a particular company’s shares.
The investor either lets his stockbroker know via email, phone or makes use of online share trading where he/she enters a price at which he wants to buy the shares as well as how many shares need to be bought.
This is known as a BUY ORDER
At the same time another investor wants to sell his company shares.
The investor either lets his stockbroker know at what price he wants to sell his shares as well as how many shares need to be sold.
This is known as a SELL ORDER
Both orders are entered into the market by each respective stockbroker.
The orders MATCH in the trading engine and a trade or transaction occurs.
The buyer receives the shares and the seller receives the money.