The broker then puts in the order to buy on the appropriate exchange, the transaction takes place when someone wants to sell and someone wants to purchase the stock at the same price. When you purchase a stock, you receive a stock certificate, the certificate may be transferred from one owner to another or can be held by the broker on behalf of the investor. Bonds also can be transferred from one owner to another. As with stocks, buyers go through brokers and dealers. Stocks, bonds, and futures contracts can also be sold in groups as mutual funds.
Mutual funds employ professional managers to make decisions about what to buy and sell.
Buyers can obtain protection against rising prices and sellers can obtain protection against declining prices through futures contracts. He is concerned about what the prices of soybeans will be in September, if the price falls he will lose money. To avoid this risk, Farmer Jones has his futures broker sell a contract for 5,000 bushels of soybeans for September at the current price. In this way the farmer locks in his September selling price. If the price is higher in September, the farmer will not make as much profit, but if the price has fallen, he will come out ahead.