In OTC trading until 1970. In that year the National Association of Securities Dealers introduced an

automated quotation system that used computers to link OTC dealers in markets around the country:

Called NASDAQ, the system has made OTC trading more visible to the public.

Investors buy listed stocks through brokers, who are officially known as registered representatives.

To buy a stock, an investor must have an account with a broker. The broker calls a member of

His firm who has a seat on the NYSE. The floor broker at the NYSE goes to the counter at which the

Stock is traded. Stocks are bought and sold by a process of auction bidding. Buyers and sellers,

Represented by floor brokers, compete for the best price. Once an agreement to buy or sell has been

Reached between the floor broker and the trader, the news is relayed back to the brokerage firm and

Then to the customer.

On the NYSE floor brokers are specialists in each stock. Among their functions are the buying

Or selling of stock when there are no other offers. This helps stabilize the market so it will not be

Subject to great fluctuations.

Much stock buying is done on margin — the buyer only has to pay a portion of the stock price at

Purchase time. The margin requirements vary, but they have generally been about 50 percent. If a

Buyer has overloaded his account with margin purchases and the market falls, he is required to