Markets · Episode 01 · Reading companion
What actually happens when you buy a stock?
Follow the order beyond the button, through execution and settlement.
INSIDE THE MECHANISMFIG. 01
01ORDERInstruction
02EXECUTIONTrade agreed
03SETTLEMENTDelivery
Your order starts a process
The Buy button sends an instruction to your broker. A market order asks for execution at available prices; a limit order constrains the price. The last traded price is a record of a previous transaction, not a promise about yours.
Execution and settlement are different
Execution agrees the trade. Clearing and settlement handle the resulting obligations and the delivery of cash and securities. The order, the trade and the settled position describe different stages.
Sources & scope
A concise reading companion to this Market Mechanics topic. This page covers the mechanism; it does not make a performance or investment recommendation.
SEC Investor.gov · Executing an orderArticle history
18 September 2026 — First web reading companion.