I understand how supply and demand works but I’m confused as to who actually is in charge of setting the price to display to all trading platforms. Since the stock price is constant across all trading platforms, what algorithm or system is in place to ensure there are no clashes or discrepancies between said platforms? Is there one dominating platform that monitors all stock prices which other platforms refer to such as the NYSE?
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There’s actually 3 relevant prices in a stock quote: bid, ask, and last.
Bid is what someone buying shares is willing to pay.
Ask is what someone selling shares is asking for.
Last is the last transaction price that was agreed on.
When you submit a trade it goes to a market which matches buyers and sellers. If you’re buying and it’s a limit order the limit price you set will be your bid price. If it’s a sell then the limit price is your ask price.
If it’s a market price order then buy price will just be whatever the current ask is, or bid for sells.
When there are many orders for the same price it forms a queue of orders at that price, first order to the market gets filled first.
Once shares have been matched to offers, that order is marked as fulfilled, the last price will update, and funds and shares will be transferred accounts within 3 days (the settlement time).
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