The old way had a bunch of traders standing around and bidding on stocks. They contracted with brokers (who are not allowed on the trading floor) to do the purchasing and selling of stocks. It was a pure auction, people yelling out that they wanted to buy or sell for a certain price and others yelling that they would take it, if they did.

This is further complicated by something called the "stock specialist". He was a trader with a special commission to trade in one stock only. It was his job to buy and sell, even when there was no broker demanding that he buy or sell for them. Basically, he had a pool of money and a pool of that particular stock. His purpose was to increase liquidity of the market. That is, to make it easier to find a buyer or a seller for that stock.

We are talking NYSE of course. And as I said before, this is the old way it was done. Now, some of what used to be done by humans is done by computers. What exactly what does that mean? Heck if I know. The bottom line leaves the market working in much the same way as it did before, only with fewer humans involved. NASDAQ has been all electronic for many years.

The stock quote numbers that you see are simply the amount that the most recent trade occurred at.