April 28, 2007
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When someone uses the word trade in regard to stocks, they are referring to the act of buying or selling stocks. There are two main methods that stocks are traded: through the Internet or on the exchange floor. The New York Stock Exchange (or NYSE) is a person-based stock trading system. The NYSE does handle a small percentage of its trading electronically, but the vast majority of trading is done on the stock exchange floor. The stock exchange floor is the most common image in people’s minds when they think of trading stocks. Within the chaos of hundreds of traders shouting and making gestures, shares are being traded. The process starts when the customer tells their broker to buy 50 shares of Company X at market. The broker then sends the order to a clerk located on the exchange floor.