Source: https://mochatrade.com/learn/us-market-structure/how-us-stock-prices-form # How US Stock Prices Form: Order Books & Exchanges URL: https://mochatrade.com/learn/us-market-structure/how-us-stock-prices-form Last modified: 2026-10-09 Lecture 1.2 of MochaLearn, Module 1: US market structure. 8:12. Video: https://www.youtube.com/watch?v=8jx2W533OW4 From the order book to the consolidated quote: how one stock trades across many venues, and when the US session falls in India. ## About this lecture The price on your chart, the price you can buy at, and the price you can sell at are not necessarily the same. So how does a US stock price actually form? Pratham starts with the order book, then follows price formation across exchanges, auctions and trading sessions. You'll learn about: - Bid, ask, spread and the last traded price - How the same stock trades across multiple exchanges - The NBBO and how quotes are consolidated - Dark pools, wholesalers and different trading venues - Opening and closing auctions, trading halts and price bands - US market hours in IST and the daylight-saving shift - The 11 market sectors and their exposure to growth, interest rates and currencies This lecture connects the numbers on your screen to the structure behind them, preparing you to understand how economic news reaches individual stocks. Educational content only. Not investment advice. [MochaLearn](https://mochatrade.com/learn) is a free A to Z course on understanding and trading US stocks and commodities, built for Indian traders. Last updated 9 October 2026 ## Key takeaways 1. The chart's price, the price you can buy at and the price you can sell at are three different numbers: the last trade, the ask and the bid. 2. One stock trades on many exchanges and in dark pools and wholesalers; the NBBO consolidates every venue's best quote into one. 3. Opening and closing auctions, halts and price bands shape the edges of the session; the US session lands in the Indian evening and shifts by an hour with daylight saving. 4. The eleven market sectors differ in how they respond to growth, interest rates and currencies. ## Terms in this lecture - 10-year Treasury yield: https://mochatrade.com/learn/glossary/10-year-treasury-yield - 24/7 trading: https://mochatrade.com/learn/glossary/24-7-trading - Beta: https://mochatrade.com/learn/glossary/beta - Book value: https://mochatrade.com/learn/glossary/book-value - Circuit breaker (US): https://mochatrade.com/learn/glossary/circuit-breaker - Closing auction (official close): https://mochatrade.com/learn/glossary/closing-auction - CME Group: https://mochatrade.com/learn/glossary/cme-group - Cyclical vs defensive stocks: https://mochatrade.com/learn/glossary/cyclical-vs-defensive-stocks - Dark pool: https://mochatrade.com/learn/glossary/dark-pool - Designated market maker: https://mochatrade.com/learn/glossary/designated-market-maker - Direct listing / SPAC: https://mochatrade.com/learn/glossary/direct-listing-spac - Dollar index (DXY): https://mochatrade.com/learn/glossary/dollar-index - Earnings call: https://mochatrade.com/learn/glossary/earnings-call - Earnings season / earnings report: https://mochatrade.com/learn/glossary/earnings-season-earnings-report - Economic calendar: https://mochatrade.com/learn/glossary/economic-calendar - Futures contract: https://mochatrade.com/learn/glossary/futures-contract - Gap up and gap down: https://mochatrade.com/learn/glossary/gap-up-and-gap-down - GICS sectors: https://mochatrade.com/learn/glossary/gics-sectors - Growth vs value stocks: https://mochatrade.com/learn/glossary/growth-vs-value-stocks - Guidance (earnings guidance): https://mochatrade.com/learn/glossary/guidance - IEX: https://mochatrade.com/learn/glossary/iex - Index ETF: https://mochatrade.com/learn/glossary/index-etf - Index futures (E-mini S&P 500): https://mochatrade.com/learn/glossary/index-futures - Index rebalancing: https://mochatrade.com/learn/glossary/index-rebalancing - IPO (US): https://mochatrade.com/learn/glossary/ipo - ISM PMI: https://mochatrade.com/learn/glossary/ism-pmi - Last traded price: https://mochatrade.com/learn/glossary/last-traded-price - Limit order: https://mochatrade.com/learn/glossary/limit-order - Limit up-limit down: https://mochatrade.com/learn/glossary/limit-up-limit-down - Liquidity: https://mochatrade.com/learn/glossary/liquidity - Market order: https://mochatrade.com/learn/glossary/market-order - Max slippage: https://mochatrade.com/learn/glossary/max-slippage - MCX vs COMEX: https://mochatrade.com/learn/glossary/mcx-vs-comex - NASDAQ: https://mochatrade.com/learn/glossary/nasdaq - NBBO: https://mochatrade.com/learn/glossary/nbbo - Nonfarm payrolls: https://mochatrade.com/learn/glossary/nonfarm-payrolls - NYSE: https://mochatrade.com/learn/glossary/nyse - NYSE Arca: https://mochatrade.com/learn/glossary/nyse-arca - Opening auction: https://mochatrade.com/learn/glossary/opening-auction - Order book: https://mochatrade.com/learn/glossary/order-book - Overnight session (24-hour stock trading): https://mochatrade.com/learn/glossary/overnight-session - Payment for order flow: https://mochatrade.com/learn/glossary/payment-for-order-flow - PPI: https://mochatrade.com/learn/glossary/ppi - Pre-IPO stocks: https://mochatrade.com/learn/glossary/pre-ipo-stocks - Pre-market and after-hours trading: https://mochatrade.com/learn/glossary/pre-market-and-after-hours-trading - QQQ ETF: https://mochatrade.com/learn/glossary/qqq-etf - REIT (US): https://mochatrade.com/learn/glossary/reit - Retail sales: https://mochatrade.com/learn/glossary/retail-sales - S&P 500: https://mochatrade.com/learn/glossary/sp-500 - Sector ETF: https://mochatrade.com/learn/glossary/sector-etf - Settlement (T+1 in US): https://mochatrade.com/learn/glossary/settlement - Slippage: https://mochatrade.com/learn/glossary/slippage - SPY ETF: https://mochatrade.com/learn/glossary/spy-etf - Stop-limit order: https://mochatrade.com/learn/glossary/stop-limit-order - Trading halt: https://mochatrade.com/learn/glossary/trading-halt - Trailing stop order: https://mochatrade.com/learn/glossary/trailing-stop-order - US ETF: https://mochatrade.com/learn/glossary/us-etf - Volume: https://mochatrade.com/learn/glossary/volume - Yield curve: https://mochatrade.com/learn/glossary/yield-curve