If I buy 100 shares of a company, does their bank account go up? And if shares are sold do they go broke?
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If you’re an average job trading stocks on the stock market, your purchase of 100 shares doesn’t (directly) impact the company at all. They already sold off the shares to the market before you bought it (and so you bought it from a broker).
Figuratively speaking, the money you spend goes to whichever other trader/investor decided to sell their shares. When you place a buy order, the transaction is actually pending until they can find a matching sell order(s) for the same price. So most of the money goes to the seller, with some of it also going into broker fees (hence why “buy” price is always higher than “sell” price).
In actuality, no money is actually moving. The only money that moves is between the brokerage itself and the customers’ accounts – and this only occurs upon transferring money in and out, which has nothing to do with individual trades.
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