In professional soccer, players are very rarely traded like they are in American sports such as baseball. They're just flat out bought and sold in a process called a transfer. So how does it work?
There are essentially three transactions that must occur to complete a transfer:
1. The two clubs must agree on a transfer fee. This is money the team acquiring the player must pay to the team letting him go. The sums can be staggering. Real Madrid, for instance, agreed to pay Manchester United $131.6 million for Cristiano Ronaldo, widely considered to be among the top three players on the planet. That's an extreme example, but transfer fees for even workman-like players can be in the millions.
2. The club acquiring the player must agree to a contract with the player. It's not like in baseball when acquiring teams simply take over the player's contract. In a soccer transfer, players are able to negotiate new contracts. In Ronaldo's case, he will be paid about $18 million a year on a six-year contract. Again, that's an extreme case.
3. In some cases there is a third transaction that must be negotiated: A deal between the player and the club he is leaving for a portion of the transfer fee. Yes, that's right. Sometimes a player wants to get his hands on a portion of the transfer fee between the clubs. Samuel Eto'o, a Barcelona player rumored to be heading to Manchester City, reportedly wants half of the transfer fee Barcelona would get from Man City. This type of deal doesn't occur in many transfers.
Players are also sometimes loaned to other teams. This is especially common for younger players who can't crack into the starting lineups on strong squads. The hope is the player will get playing time on the borrowing club when he couldn't at the lending club. (American Jozy Altidore was loaned from his top division Spanish league team to a lower division team and still couldn't crack the starting 11 at the lower club, which is no surprise after seeing him play in the recent Confederations Cup!). A team might loan a player to another team in it's own league, in a lower division or even to a team in a different country.