The stock market is a complex ecosystem.TerminatorarcadegameWhich involves many factors and mechanisms. In this article, we will explore in depth the trading mechanism of the stock market, that is, how stocks are traded between buyers and sellers. First of all, we need to understand the basic concepts of the stock market. The stock market is an open market that allows investors to buy and sell stocks. In the stock market, stocks are usually traded through electronic trading platforms that connect buyers and sellers. The trading mechanism of stocks can be divided into two main types: spot market and futures market. In the spot market, stocks are traded immediately, and buyers and sellers deliver stocks and funds at the end of the trading day. The futures market is different, where buyers and sellers deliver stocks and funds at an agreed time in the future. Next, let's take a look at the three key steps of stock trading: order execution, price discovery and transaction settlement. Order execution: when investors want to buy or sell sharesTerminatorarcadegameThey will submit orders to the trading platform. The trading platform executes the order according to the type of order (such as market price order or limit order) and conditions (such as buy or sell). Price discovery: price discovery is an important process in the stock market, which determines the market price of the stock. The price discovery process is usually done through an order book, which records all outstanding buy and sell orders. The stock is traded when the highest price the buyer is willing to pay matches the lowest price that the seller is willing to accept. Transaction settlement: transaction settlement is the last step in stock trading, which involves the transfer of stocks and funds. In the spot market, stocks and funds are usually delivered on the second day of the trading day (also known as Tunable 1). In the futures market, delivery usually takes place at an agreed time in the future. To better understand the stock trading mechanism, let's use a table to compare the differences between the spot market and the futures market:
