How_Money_Works_-_The_Facts_Visually_Explained

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PROFIT-MAKING AND FINANCIAL INSTITUTIONS

Financial institutions

$ $

Buys for $420

$20

Seller

Contacts broker,

who may provide

recommendations

or simply process

trades for a fixed fee.

Buyer

Must be in credit

before the brokerage

puts through a

buy order. Corporate

clients may be able

to negotiate loans

or credit.

Broker

Acts as an intermediary,

charging a flat fee and/or

commission on the trades they

execute, as well as profiting

from the bid−offer spread.

Real-time trading

If a retail investor is

using an online trading

platform, the price at

which they can buy or

sell the security is displayed

online. They have a finite

amount of time to decide

whether or not to accept that

price and trade at that level.

OFFER PRICE

$420

BID PRICE

$400

Bid−offer

spread: $20

Transaction

fee: $20

Commission:

1% = $4.00

To t a l: $24.00

$$$

$

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