مجلة العلوم الإقتصادية
Volume 20, Numéro 1, Pages 202-230
2025-03-31

Mechanism Of Trading In The Stock Exchange - With Practical Applications

Authors : Cedra Anissa .

Abstract

This scientific paper introduces the mechanism for determining security prices in the stock exchange and how transactions are executed based on the laws of supply and demand. The study aims to examine how the equilibrium price of securities is established through buy and sale order data, providing a detailed analysis of market mechanisms in this context. The issue was studied through theoretical and empirical analysis of how supply matches demand in trading sessions, focusing on the tools and settlement methods employed in exchanges. This study used simulation models on purchase and sale order data to demonstrate how the equilibrium price is determined and how orders are executed at market prices. The findings demonstrate that the market reaches an equilibrium price when actual demand equals or closely approaches actual supply. They also reveal that prices continuously fluctuate based on changes in supply and demand, highlighting the interaction between different market forces. This study contributes to identifying how financial markets operate and offers insights into how transactions are settled and how prices are determined in a continuous trading environment.

Keywords

Financial markets ; Stock exchange ; Buy and sale orders ; Equilibrium price ; Clearing and settlement