how do stock markets work?
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Stock markets are regolamented markets in wich you can buy and sell stocks, (shares, partecipations in a corporation).\n\nThere are two different ways in which stock markets can be organized. In quote driven markers negotiations are pulled by prices: the dealers show the bid and ask prices at wich they buy and sell a share.\n\nIn order driven markets the price of a stock is determined by demand and supply for that stock without the intermediation of a price-maker dealer. Generally it is similar to a double auction sale: many sellers sell to many buyers.
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About common stock, the market will set the price on common stock. The buyer puts bid price and the amount of stock he or she willing to buy. The stock holder puts sell price and amount of stock on sale. In the market, you can see bid price and sale price. Once the two price becomes the same, the transaction would make base on the amount of stock. When the transaction occur , the stock price will show on the market. \n\nOther stock type\npreferred stocks: Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation. Usually does not carry voting rights.This stock price is set by company.\n\nmarket price: A security's last reported sale price (if on an exchange) or its current bid and ask prices (if over-the-counter); i.e. the price as determined dynamically by buyers and sellers in an open market.
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Ads and also they are traded on the stock market at a value of more than they are worth. Google and Yahoo do have other ways of making money like charging for different services like Yahoo auctions and Google has banking services.
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Stocks go up and down due to supply and demand foreces created by buyers and sellers.\n\nMore demand, less supply = Price go up\n\nMore supply, less deman = price go down\n\nBuyers receive the money, sellers pay up the money\n\nBrokers get a commission. The stock market is a minus sum game as broker commissions whittle away the value that is being traded with their commissions.
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The stock market reacts to news and economic conditions. By the time the market reacts the event has already occurred. If you are waiting on the market to tell you where things are headed, you are already too late.
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As far as I know, you buy the stock at a certain price. Example, you buy a share of yahoo stock for about $30. You watch as the price of the stock goes up and down. Let's say that the next day, yahoo's stock price goes up to $31. Then, if you only bought one stock, you would GAIN $1 (if you sold it then, but let's pretend u didnt). To get your total gain, you would multiply the change in the stock price and the number of shares you bought. So if you bought 10 shares of yahoo stock, and the price went up $1, you would have gained $10.\nNow, for the LOST. Let's say that the stock price for yahoo stock went down the next day to $29. That means you LOST $1, NOT $2, because you bought the stock for $30. So $29 - $ 30 is -$1. (The negative means you lost money) \n\nSO overall, to get your change in stock price, you subtract the stock price of that day to the stock price in which you bought it from. (E.g. $29 - $30 in my above example) And if you bought more than one share, which is what happens 99% of the time, then you multiply the change in stock price and the number of shares you have. Negative means you LOST money, and positive means you GAINED money.\n\nAm I helping? Sorry, if your still confused, contact me, and I will be happy to straighten out any confusion I may have caused.
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A stock exchange, where stocks are bought and sold, is considered a market. Equities are shares (or stocks) in a company. Sometimes the company offers shares of itself called the initial public offering, but mostly you are buying and selling shares from other people, not companies. This is why a market is necessary so a buy and sell price for equities (stocks) can be determined.\n\nStocks are offered by sellers at an ASK price. Stocks are requested by buyers at a BID price.\nThis is how a deal for the stocks is negoiated, real time.
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Stocks are simply small fractions of ownership of very large companies.  These stocks are owned by very many people and they need to buy/sell those shares sometimes.  Of course, buying and selling is referred to as investing.\n\nHere are a couple of websites that I have found very useful:\nhttp://www.dallasnews.com/business/scottburns/\nhttp://www.bobbrinker.com/
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The answer is by using simple mathematics.\n\nFirst you need to decide how much of each stock you are going to buy - since not all stocks are priced equally some would be $20, other $400 and some 0.05 cents.\n\n$100,000 over ten stocks... Decide what ratio you will hold of each stock. E.g. 6:3:4:1:9:4:3:7:9:2\n\nSo totalling the ratio is 48. Now you can use a combination of the ratios and fractions to find out how much stock you can hold with your $100,000.\n\nI may have left you out on a limb there - but this calculation is uneccessary. Why don't you just buy your stock one by one until you run out of money? :P\n\nOK Lets try the example with 2 stocks and $100K\nyou want the weighting to be 3:4\nso you want \n3/7ths of your money to go to 1 stock\n4/7ths of your money to go to 1 stock\n\n3/7*100K=$42857.14\n4/7*100K=$57142.85\n\nNow say stock ZXC was $5 each and stock ABC was $67\n\nNow you go:\n$57142.85/$67=852.88 Stocks\n$42857.14/$5=8571.43 Stocks\n\nThere you go. Now do the similar calculation with your ten stocks! Haha!\n\nGood Luck!
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I dont know what kind of answer you're expecting. I'm New York USA. We have the Nasdaq, S&P 500, New York Stock Exchange and a few others. Stocks go up and down. You would need to learn alot about stocks and how they work before "getting into stocks". \nStock  101. A small company decides they will incorpate their business. When they incorporate they give stocks to other members of the company. These members are then shareholders. Each share has a worth. It could be $0.20 or $20.00 or anything else. As more people buy the cost of shares rise. As more people sell the cost of shares drops. People get ansy about buying stocks. It's like gambling. You don't know if the your shares will go up or down. People study the company and the market. For instance, Someone has designed a machine that will make typing a letter much easier than using a typewriter. With a typewriter you have to press hard on the keyboard. You must buy ribbon. You must buy correctype and if you want a different font you will nead to buy a new daisy wheel or other item in order to change the font. This new machine will prevent more error because it allows you to see the words before they reach the paper, which give you a chance to backspace without using white out or correct type. No wasted ink. Less paper to throw away because less mistakes are made. And hey my machine even has a spell check. The person who invented the machine has already told all his friends. He has an article in the newspaper. Some reporter had an interview with him. He has even written a short book about it and some new other inventions he has lined up. He has a 10 year patent on his machine. Now keep in mind that the manufacturer of the old typewriter has many "shareholders". The manufacturer of the correct type or white out also has share holders. The Ribbon Manufacturer also has shareholder and the manufacturer of the ink for the ribbon also has shareholders. The new typewriter is called a word processor. He going to sell his new word processor to book publishing companies first. Then hes going "Go Public" and have the outside public buy shares. He just announced the new and improved word processor for the home office. Its lighter and more affordable. It will be just a matter of time before the old typewriter is out of business. A smart shareholder would sell his stock once he/she read or heard of this new invention and start buying shares of the manufacturers of the material (sony, toshiba, texas instruments) of the new machine as well as the new machine (brother, panasonic).\nAnother example: You know that there was a tsunami that destroyed the cities where the largest manufacturer (Company A) of computer memory chips were manufactured. You also know that the second largest manufacturer (Company B) of computer memory chips will now become the largest until Company A gets back on its feet. You had shares in Company A. Well you are going to sell those or just expect a major loss but you've thought ahead and borrowed some money and purchased a huge amount of stocks from Company B. Smart move unless you did'nt read that there was another Company A manufacturing plant in another city not affected by the tsunami.\nDepending on how much you want to invest and on what kind of risks to take will determine how you want to invest. High Risk = Stock Broker. Low Risk = Mutual Funds, CD's, Treasury Bonds.\nI would suggest speaking with stock broker. But be very weary, they are bigger snakes than used care salesmen.
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Short selling is absolutely insane for you if you are asking a question like this.\n\nA "short sale" is basically a minus sign in front of what would happen if you bought a stock. \n\nSo, if you normally buy a share of stock (say for a hundred dollars) and it goes up a dollar, you make a dollar (or a 1% return). And if it goes down a dollar, you lose a dollar (for a -1% return). When you have sold a share short, if the real share goes up a dollar, you lose a dollar, and vice versa.\n\nThat's all there is too it. You lose money if the stock goes up, and make money if it goes down, the opposite of what would happen if you engaged in the normal transaction of purchasing a share.\n\n(There are a number of related things that happen because you have to pay interest on the borrowed share, but you can invest the money that you got from selling, but at the same time you can't invest the money that you used to buy a share... you can ignore all this and interest you pay or receive all comes out in the wash; the market is fair.)\n\nSo, if it's so simple, why would it be insane for you to do? Because, most stocks go up most of the time. \n\nOther investors have invested their money in companies that are out there, and many of those investors both have done more homework than you, and are smarter all around investors anyway. So, If a company has shares traded, that means that other people think that investment is going to go up. The stock market is not flipping coins, companies create value out of thin air by people working hard. So, people work hard and create value and shareholders benefit from that.\n\nSo, since shares are expected to go up, when would you ever bet that they'll go down?\n\nAnswer: NEVER\n\nSo, why would you short sell?\n\nWell, you short sell to get rid of risk in your portfolio from other investments. Here is the easiest example: if you are Henry Ford VI and you inherited a bunch of Ford shares and you are not allowed to sell them, you can keep them, and short sell somebody else's. You still own yours, but if they go up $1, you don't earn the $1 because you also short sold another one which lost a dollar, so no matter what Ford does, you break even. Now you can invest your money sensibly in what you want, instead of all in Ford. All in Ford is risky, and short selling for you actually reduces your risk instead of increasing it.\n\nThat (and similar transactions) are what short selling is for.
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A stock exchange is an organization of which the members are stock brokers. A stock exchange provides facilities for the trading of securities and other financial instruments. Usually facilities are also provided for the issue and redemption of securities as well as other capital events including the payment of income and dividends.\n\nThe securities usually traded on a stock exchange include the shares issued by companies, unit trusts and other pooled investment products as well as corporate bonds and government bonds.\n\nUsually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only; a stock broker is said to "have a seat" on the exchange.\n\nA stock exchange is often the most important component of a stock market. There is usually no compulsion to issue stock via the stock exchange itself and nor must stock be subsequently traded on the exchange: Such trading is said to be "off exchange".\n\nThe initial offering of stock to investors is by definition the primary market and subsequent trading is the secondary market.\n\nIncreasingly all stock exchanges are part of the global securities market.\n\nSupply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks (see stock valuation).\n\nIn francophonic European countries stock exchanges are called bourses.
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The market forces. In free market societies, interest rates, purchase parity of a basket of goods, and a premium for innovation and security would establish currencies values. Thus, the market establishes the rates.\nIn other societies, the government enters the market or simply fixes or freezes any transaction. Ex. China.
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based on supply and demand.  Too detailed to explain in a q&a.  If you're in school, take a finance and economics class.
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Exchanges and Brokers\nThere are three big stock exchanges in the United States: \n•NYSE - New York Stock Exchange \n•AMEX - American Stock Exchange \n•NASDAQ - National Association of Securities Dealers \nA company "lists" its stock on an exchange. For example, the NYSE has about 3,000 companies listed. According to the NYSE \nAt the end of November, 1998, there were 3,104 companies with stock listed on the NYSE. These companies had over 236 billion shares worth a total of $10.1 trillion available for trading on the Exchange, giving the NYSE the world's largest market capitalization (in global market-value terms, the total global value of the NYSE-listed companies exceeded $12.8 trillion). \nAnyone who wants to buy or sell stock in any of these 3,000 or so companies goes to the New York Stock Exchange to do it. \nOf course, no one wants to fly to New York to buy or sell their shares. A person therefore calls a stock broker in a firm that is authorized to trade at the exchange. There are dozens of such brokerage houses, including such familiar names as Merrill LynchCharles Schwab and Morgan Stanley When you call up a broker at one of these companies, he or she relays your trade to the floor of the appropriate exchange, and a representative of the company (or, more commonly, a computer representing the company) makes the trade on your behalf. You pay the broker a commission (generally $10 to $100 per trade, depending on the broker) to provide this service to you. \nStocks that are not listed on an exchange are sold Over The Counter (OTC). OTC stocks are generally in smaller, riskier companies. Usually, an OTC stock is stock in a company that does not meet the requirements of an exchange. \n\nStocks in publicly traded companies are bought and sold at a stock market (also known as a stock exchange). The New York Stock Exchange (NYSE) is an example of such a market. In your neighborhood, you have a "supermarket" that sells food >. The reason you go the supermarket is because you can go to one place and buy all of the different types of food that you need in one stop -- it's a lot more convenient than driving around to the butcher, the dairy farmer, the baker, etc. The NYSE is a supermarket for stocks. The NYSE can be thought of as a big room where everyone who wants to buy and sell shares of stocks can go to do their buying and selling. \nThe exchange makes buying and selling easy. You don't have to actually travel to New York to visit the New York Stock Exchange -- you can call a stock broker who does business with the NYSE, and he or she will go to the NYSE on your behalf to buy or sell your stock. If the exchange did not exist, buying or selling stock would be a lot harder. You would have to place a classified ad in the newspaper, wait for a call and haggle on a price whenever you wanted to sell stock. With an exchange in place, you can buy and sell shares instantly. \nThe stock exchange has an interesting side effect. Because all the buying and selling is concentrated in one place, it allows the price of a stock to be known every second of the day. Therefore, investors can watch as a stock's price fluctuates based on news from the company, media reports, national economic news and lots of other factors. Buyers and sellers take all of these factors into account. So, for example, when the FAA (Federal Aviation Administration) shut down the company ValuJet for a month in June 1996, the value of the stock plummeted. Investors could not be sure that the airline represented a going concern and began selling, driving the price down. The asset value of the company acted as a floor on the share price. \nThe price of a stock also reflects the dividend that the stock pays, the projected earnings of the company in the future, the price of tea in China (especially Lipton stock) and so on.\nStock Prices: Income vs. Growth\nThe price of an income stock tends to stay fairly flat. That is, from year
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Good question.  I wish that more people would LEARN about how the stock market exists and participates in its usage.\n\nThe best way, first of all, is to understand the fundamentals of business.  Not just how it works, but what constitutes profit, earnings, etc. Once you have a fair understanding of how business works, then you are ready to understand the stock market.\n\nDON"T get into it, though, if you are just looking to make money WITHOUT doing any work, either in researching the companies, or in researching the people who research the companies (broker consultants)!  That is probably my only caveat. \n\nNow...start here for your stock market tutorial... Good luck!\n\nhttp://www.investopedia.com/university/stocks/\n\nRemember me in a few years when you are filthy rich so I can do research for you at 8 bucks an hour...
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Stock- It enables companies to raise money thru sharing equity and it enables the public to participate in the well being and management of a company.\n\nBond- It enables companies to raise money thru borrowing money and it enables the public to buy debt instruments at a better yield than US Government bonds.\n\nOption- It enables the buyer to participate in the price move of an underlying security for a smaller entry cost than buying the security itself. It enables the seller to generate slight income from an otherwise static position.\n\nFuture- It enables suppliers to lock in sales prices of commodities at some future date...turning a variable revenue into a fixed revenue. It enables buyers to lock in a price paid at some future date...turning a variable expense into a fixed expense.\n\nEssentially financial instruments enable the transfer of capital and risk to occur.