Let’s say you want to purchase your first stock. Then this order will typically go through a stock exchange. But how exactly does an exchange work? And how do you, as an individual investor, get access to it?
An exchange is a place where buyers and sellers come together to trade financial instruments, such as shares and bonds. There are many stock exchanges, located around the world. Famous examples are the London Stock Exchange in the UK, Euronext Amsterdam in the Netherlands, and perhaps most famous of all, the New York Stock Exchange in the USA. Many exchanges have specialized listings, based on location, company size, or sector. The NASDAQ exchange for instance, primarily lists tech shares.
Trading used to be carried out on the trading room floor, by people who were present in the building at the time of the trade. And while many people still have the picture of a stock exchange filled with people yelling and computers flashing numbers, the scene inside is much quieter now. These days, you are more likely to find a number of computers on the trading room floor.
For individual investors, it is easier than ever to access global markets from the comfort of your own home. You do this with the help of a broker, because exchanges only deal directly with professional, licensed entities. This is where a stock-broker comes in, acting as an intermediary. By opening an account with DEGIRO, you gain access to a trading-platform connecting you to more than 60 global marketplaces.
The primary role of a broker is to facilitate orders on your behalf. DEGIRO does this by using our in-house developed infrastructure and trading platform. With this, you can view markets from across the world and use different analytical tools to make your investment decisions. You’ll also see an overview of news reports and price-charts. The platform is available on your computer or mobile-device, so you can access your account anytime, anywhere.
While most brokers are now similar in terms of the services provided, the fees you pay to trade are still very different. And as these fees have a substantial impact on your returns, it is important to carefully weigh your options when choosing a broker. DEGIRO currently operates in 16 European countries and is therefore able to offer incredibly competitive rates. On our fee page, you will find a full breakdown of the fees, and see how these compares to other brokers.
The next lesson will explain different financial products you can choose from, once you want to make a trade.
Investing involves risks. You can lose (a part of) your invested funds. We advise you to only invest in financial products which match your knowledge and experience. This is not investment advice.
Investing places your capital at risk. Read our full warning here.
We want to empower people to become the best investors they can be. By offering a universe of possibilities and choices on our user-friendly platform, we are removing barriers to make investing accessible to everyone: beginners or experts. You get access to a wide variety of products on more than 50 global exchanges to have the freedom to invest the way you like. In our world, you also get great value for money. So, without compromising an inch on the quality, security and range of our investment services, we offer incredibly low fees. Prioritising your needs has helped us become the leading European online broker. Our 2.5+ million clients and 100+ international awards are proof of our success.
This communication is issued on behalf of flatexDEGIRO Bank AG and has been approved as a financial promotion on 3rd August 2023, for the purposes of section 21 of the Financial Services Market Act 2000 (FSMA), by Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (FRN:574048). flatexDEGIRO Bank AG is an overseas firm which is not authorised by the Financial Conduct Authority. This means that the FCA Rules made under FSMA for the protection of retail clients do not apply to the services provided by flatexDEGIRO Bank AG but investors are instead protected under applicable German law and Dutch law rules that apply to flatexDEGIRO Bank AG. Investors are not protected by the UK Financial Services Compensation Scheme.
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