When I was young, I always used to ask myself that why some people remain so mad about Stock Market and what actually is a Stock Market? Why we suddenly see people making billions of dollars in months or losing billions of dollars in days? Therefore, through this article I am trying to make it simple for others to understand what basically is Stock Market and how it functions. The most basic work of any stock market is to facilitate trading in various company stocks and derivatives.
Stock Market provides an easy option in front of companies to borrow money from people and financial institutions by offering company stocks in return to them. Any Stock is listed on Stock Market at particular face value plus premium value which is determined by various agencies affiliated with Stock Market. For example if a stock has face value of Rs 10 and premium value of Rs 100 then this stock will be listed at Rs 110 on stock market and will be available to people at this price.
Face value is termed as actual value of stock (which never changes) while premium value is risk or time or extrinsic value which is paid to seller for reducing the risks of selling stocks to buyers (changes with demand). After listing on Stock Market, any stock becomes available for trading on open stock market. Now stock becomes totally dependable on market reactions and demands. Stock moves up in the Stock chart and value if there are more buyers for it at higher value, however, stock moves down if there are more sellers for stock at lower value. Investors reward good performing company stocks by buying them abd thus increasing their value, while investors punish bad performing company stocks by selling them and thus decreasing their value.
However, there are many exceptions in Stock Markets where many Stocks increase on speculation and despite bad performance by companies. Therefore, Stock Markets become unpredictable where people can simultaneously make huge amount and also loses it in minutes. However, with proper planning and long term goals people can make good returns from Stock investments.
Also read-1)Live Indian Stock Market Toolbar
2) Live NSE and BSE (Live Indian Stock Market)
3) Stock Market below 13000 points, Sign of Caution
4)India stock market below 14000 Points, What to do now?
5)Why India stock market is down?
6)What caused Black Monday for Indian stock Market?
7)Indian stock market lost 20 Lakh crore in seven days
8)Indian stock market and terror funding
9)Tips for avoiding Risks in Stock Market investment
10)India stock market crossed 20,000 mark for first time
I just downloaded Google’s latest web browser Chrome and it is really fun to use it. My first impression about this web browser is very posi...
Below, I am going to share few free websites which are offering free social networking solutions to people. With the help of these websites,...
To whom it may concern Subject- Illegal distribution of Content of thoughtsofanordinaryman.com Please not that it is illegal to accept ...
Here is a short film titled "Life is Beautiful" which tells us that how beautiful life we have. However, the problem is that we d...
Swine Flu is slowly spreading in India and it is causing panic among people. So far thousands of cases of Swine Flu cases are reported from ...
Below, I am sharing top 5 webhosting plans which offer some or other unique features to people. Some webhosting plans are economical, some a...
Thanks to many options of portable coffee makers available in market anyone can think about making a delicious hot cup of coffee in few mi...
Today’s Saturday is very important in numbers of way as on this Saturday, Shani dev will be in most influencing and powerful mood. Different...
“Wings of Fire” is an autobiography of former President of India and an eminent scientist Shri A P J Abdul Kalam. It is very important for e...
In India, many people may find it very surprising to learn that people in USA use manufactured homes. In many states of US, homes are constr...