Important information about stock trading, and exchanges

People holding shares may sometimes need money. They cannot trade their shares in the company for money. It is for this purpose that exchanges have been set up. At the exchange buyers and seller gather to trade shares in exchange for money. To trade the buyers and seller have to place order with their brokers. The brokers send the orders to the exchange for execution. At the exchange there is a counter for each company where the shares are traded. The buyers stand in descending order of their quotes and the seller stand in ascending order of their quotes.When the quote for buy and sell match a trade takes place. People place buy and sell orders with their brokers who in turn send them to the exchange for execution. There are different type of orders a) buy order and b) sell orders. These are market orders or limit orders. Buy order is also called going long in that share and sell order is referred to as a shorting of shares when you sell share that you do not possess. You have to close the short position before the trading for the day ends. Closing of long position is called unwinding and closing of a short position is called short covering.