SHARE MARKET AND HOW DOES IT WORK

Market works through a wide network of exchanges. Companies list shares of their stock on the exchange to raise money and funds and to grow their business and investors buy and purchase those shares. Then the investors trade, buy and sell those shares amongst each other and the exchange tracks the demand and supply of each listed stock thus determining its trading price. The price of the security is determined by the demand and supply of the security and also it depends on the level of stock market participants, which includes traders and investors, who are willing to buy and sell. Most of these calculations are done through computer algorithms. Sellers quote a price for their share and then buyers offer a ‘bid’ which is the highest amount they are willing to pay and is usually lower than the amount asked by the seller. This difference is known as the bid-ask spread. Thus for a trade to occur either the buyer has to incr

SHARE MARKET AND HOW DOES IT WORK

Market works through a wide network of exchanges. Companies list shares of their stock on the exchange to raise money and funds and to grow business and investors buy and purchase those shares. Then the investors trade, buy and sell those shares amongst each other and the exchange tracks the demand and supply of each listed stock thus determining its trading price.

The price of the security is determined by the demand and supply of the security and also it depends on the level of stock market participants, which includes traders and investors, who are willing to buy and sell. Most of these calculations are done through computer algorithms.

Sellers quote a price for their share and then buyers offer a ‘bid’which is the highest amount they are willing to pay and is usually lower than the amount asked by the seller. This difference is known as the bid-ask spread.

Thus for a trade to occur either the buyer has to increase his bid or the seller has to decrease their asking price. This is how the stock market functions.

Thus by trading in a stock market can prove very profitable if you know about the companies of whom the stocks are listed and thus it is critical to have complete knowledge of the companies and trades so as to make merry at the stock market.

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