Before we get into the discussion about the stock market, let us first describe what a share is? A share is a part of the ownership of the company. To take stock of a company you become share holders of the company that has a special right of company profits and earn the right to vote in the annual general meeting of share owners to decide on the management of the company. By issuing shares companies raise capital from the market that they can use to expand its business. New companies can also issue shares called IPO or initial public offering to raise funds for the start of the operation. Of issuing shares, a company must be displayed on a market and there are some criteria which they require in order to fulfil have shown on the stock exchange.
What are the features of the market-is the primary function of the market to provide a common platform for businesses and traders. Companies can issue shares to raise funds through the market. Traders about buyers and sellers can trade with such stocks on the stock market at an agreed price. This is, of course, the basic functionality of the stock market and other features as well as carried out by the stock market. Stock Exchange also provide information for traders, companies, brokers and analysts about the rise and fall of prices, volume and so many other factors that govern the UPS and the stock market.
How price rise and fall on the stock exchange bid price is the price that a buyer is willing to buy stocks. This means that if you sell this stock you get this price for your inventory when you sell on the market. On the other hand is an ask price, the price a seller is ready to sell their stocks. This means that buyers will need to pay the price to buy the share. The difference between the bid price and the ask price is called the spread. The greater the spread, the more active on the market. It is generally accepted that demand is the decisive factor for the price of the stock. When demand for a particular stock is high, the price of this stock on the rise. Greater demand for stock means that there are more buyers on the market than the number of sellers in the market. But when there are more sellers than buyers for stocks on the stock market, which is when the demand for a stock declines since the price of this stock also falls on the market. Of course, there are so many factors that are crucial for increasing and decreasing the demand for a particular stock.
Factors that control price as we have already noted, there are so many factors that control the price of stocks on the market. It is mainly by the company in the recent past and the future of the company in this context that has direct influence on demand and then on the price of the stock. Apart from the current development of the market, the development of the sector belonging also control the price of a stock.
As a trader, you can make profits by investing in stocks through a registered stock brokers. You need to buy and sell shares to make a profit, and for this, you need to have a clear understanding of the stock market and extensive knowledge of stocks trading behavior.
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