How does the ASX work?
Buyers meet sellers. Prices happen.

Quick answer

What is the ASX?

The ASX is Australia’s main securities market. Companies can list shares on the exchange, and investors can buy or sell those shares through brokers. ASX states that orders are entered into its trading platform by brokers and are generally matched according to price and then the sequence in which they were entered.

A trade happens when a buy order can be matched with a sell order. The price of that transaction becomes part of the market’s price history.

What is a share?

A share represents part ownership of a company. If a company has shares listed on the ASX, those shares can be bought and sold by market participants, subject to the market’s rules and the access provided by brokers.

What are bids and offers?

A bid is a price a buyer is currently willing to pay. An offer, also called an ask, is a price a seller is currently willing to accept. The highest visible bid and lowest visible offer are often called the best bid and best offer.

The difference between them is the bid–ask spread. In heavily traded shares the spread may be tight. In thinly traded shares it can be much wider, which matters because the displayed last price may not be the price you can actually trade a meaningful position at.

Why does a share price move?

A share price moves because the balance of willing buyers and sellers changes. New information can make buyers willing to pay more, sellers willing to accept less, or both. Earnings, company announcements, commodity prices, interest rates, market sentiment and plain old positioning can all change that balance.

The chart records the result. It does not tell you why by itself.

What is liquidity?

Liquidity describes how easily an asset can be bought or sold without causing a large price change. More liquid shares tend to have more active buyers and sellers and tighter spreads. Less liquid shares can gap between prices, fill orders only partially or produce larger slippage.

This is why two stocks showing the same percentage move can carry very different execution risk.

How does your order reach the ASX?

You place an order through a broker. The broker transmits that order to the market subject to its own platform rules and the relevant market rules. ASX explains that buy and sell orders are then matched in its trading platform. After a trade executes, your broker provides a confirmation.

For beginners, the practical lesson is simple: learn what your broker’s order types actually do before using them. The label on the button is not a risk-management plan.

What should you learn next?

Go next to market, limit and stop orders, then learn how to read a stock chart. When you are ready for deeper price context, use BowerLine’s guides to support and resistance, volume and market structure.

Reference: Australian Securities Exchange, “How to buy and sell shares”, accessed 2026.