How Does the Stock Market Work ?


Stock Markets bring the sellers and the buyers close together by enabling them to bring the capitalization of the country by traded funds.  Tough this sentence seems to be so meaningful and worthy but stock markets are full of rush and that scares almost every person in this world. But it is not so scary if you find the about what the Stock Market really is? And how does Stock Market works?

Stock exchanges enable businesses, governments and organisations to raise capital, in order to invest or grow, from individuals and institutions that are willing to invest money in exchange for securities that could potentially grow in value.

All about Buying and Selling Stocks and Shares:

When you talk about stock, it is the term that is generally used for the piece of company that you are going to buy. Buying stocks or shares is the buying of the part of the company for a small interval or time in order to increase the income. And the company that needs to raise their incomes, issues share. For instance, if you buy a single share of some company, then in future, the one billionth profit of the company you buy is assured to you.

And the price at which you are going to buy a share is the bid price of the share or stock and the price at which the seller of the share of a specific company wants to sell the share is called the offer price.

What is a Stock or Share?

When you buy a stock you’re buying a piece of the company. When a company needs to raise money, it issues shares. This is done through an initial public offering (IPO), in which the price of shares is set based how much the company is estimated to be worth, and how many shares are being issued. The company gets to keep the money raised to grow its business, while the shares (also called stocks) continue to trade on an exchange, such as the New York Stock Exchange (NYSE).

Bottom Line:

So stocks are issued by the company or the industry to raise the earning or profit and then it continues to trade on the exchange. There are many perks of buying and issuing the stocks and every company sharing the stocks to the buyers form a stock market. And that includes:

  • Dividend Incomes
  • More profit potential
  • Voting rights
  • Expanding of the Business

Stock Markets provide the liquidity to the investors and as well as to the companies. It enables the persons, organizations and also the governments to raise their assets in order to expand and grow in business . This is how Stock Market Works , Try your luck on stock Market . Dont invest blindly , Make a dummy portfolio and monitor those stocks regularly and when ever any dip buy them and sell them when it reached your target . My advice is dont be greedy , set a possible target once it reaches the target sell them .