How does the stock exchange actually work? What exactly happens when a transaction is made online?
The bid price is the asking price to buy shares. The ask price is the asking price to sell shares. And the sale price is the price at which shares were actually sold. Buyers can enter a buy order specifying how many shares they want to buy and at what price. Sellers can enter a sell order specifying how many shares they want to sell and at what price. And a sale happens when the asking price and the bidding price coincide with each other. And this sale price then becomes the latest stock price for all shares of that company.
