1. How to Buy & Sell Stocks & Bonds

2. Where are stocks bought & sold?  NYSE – oldest & largest stock exchange  OTC- over the counter market  Traded through brokers  Bonds are usually sold here

3. Activity 1  Without financial markets individuals would find it very difficult to trade their stocks and bonds.  Get a copy of Activity 1 from the Investing 3 ring binder

4. Activity 1 continued  How do financial markets help sellers like Veronica and buyers like Ron?  They reduce the costs of trading for sellers & buyers.  They provide information about potential trading partners  They supply more than 1 buyer or seller so that competition can establish a price satisfactory to both parties in the transaction.

5. Activity 2  Read the play together

6. Where to buy stocks & bonds  Full Service Brokerage Firms  Give investment advice  Offer a wide variety of financial products & services  Charge higher commissions  Discount Brokerage Firms  Do not give investment advice  Offer limited number of financial products and services  Charge Lower commissions  Buying Online  Buyers pay lower commissions  Buyers can more easily compare brokerage services  Dividend reinvestment plans(DRIPS)  Many large companies offer DRIPs  Stockholders are paid dividends in the form of stock  No commission fee is charged.

7. What kind of investor would benefit most from dealing with a full-service broker?  Someone who is not very knowledgeable about what stocks to buy and does not want to take the time to research individual stocks.

8. Answer and Turn In  What is the NYSE?  Less than ½ of all stocks are traded on exchanges file the NYSE. How are the rest traded?  What role do brokers play in buying and selling stocks?