Trading - what is it? The concept in different areas of life

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The life of an individual or legal entity is impossible to imagine without bidding. And this situation has been observed for a long time. Bargaining is a concept that persists in different economic systems. But it was in a market economy that it became the main means of sales. For an ordinary person, it is an opportunity to provide oneself with material or spiritual benefits, and for an entrepreneur, this is an element of activity necessary for the financial stability of the organization.

Definition of concept

In general, there is no single definition of this term. Its meaning depends on the area in which the concept of "bargaining" is used. In ordinary life, bargaining is the buyer's actions aimed at obtaining a certain product at a lower cost than it was originally offered. In large organizations, this term is most often referred to as an auction. This is a public auction in which the buyer who named the largest amount receives the goods.

It should be understood that bidding does not shrink the other person in any way. This is a way to reach a compromise between several parties. And bidding can be offered both at the initiative of the buyer and the seller. For example, discount cards area kind of bargaining initiated by the trading network. The benefit is mutual: a person buys goods cheaper, and the store gets a regular customer, which can bring him even more income than if he visited it occasionally and without a discount.

Types of trades

There are two types of bidding in business: open and closed. Open bidding is an auction in which participants see how much is called by another potential buyer, and during closed bidding they lose this opportunity. Closed auctions can be held both through regular mail and via the Internet. In this case, simply the one who named the highest value receives the goods, and the rest have nothing.

Trading volume

This is the total number of items sold in one reporting period. It can be a day, month, quarter or year. As a rule, most often we are talking about the number of shares when the concept of "trading volume" is mentioned. And the higher this indicator, the greater the liquidity of the financial instrument used, that is, its ability to convert a share into money. As a rule, when it comes to an auction, it is most often about real estate. Although the seller can trade and movable. And stocks are just such a commodity. Therefore, trading volume is relevant to the auction.