how does stock market works?
152114
It's easy.\nYou sell a part of your business to investors.\n\nLet's say your chicken recipe tastes great and everybody likes it but you don't have $100,000.00 to open your own restaurant.\nYou talk to your neighbours, to your friends, to your mother and you sell 100 shares of your new restaurant for $1000.00 each.\nYour mother buys 50 shares and you invest all your savings of $25,000.00 and 25 others invest for a total of 100 shares.\nYou now have 27 investors (Including yourself)\n\nYou open your new Restaurant it's called Kentucky Fried Chicken and everybody loves it.\n\nAfter a while you realize you need to open another location and you now need another $100,000.00 but so far the profits are just $50,000.00 and not everybody wants to invest in your new location because it may not work like the first one. On the other hand, neighbours that did not wanted to invest in your first location now they want to make a lot of money too with your recipe and they want to invest in your Chain.\nYou decide to offer 200 shares this time but at $2,000 each.\nThis raises $400,000.00 (Enough for 4 new locations)\nHowever, after your ad on the newspaper you get over 800 investors interested in your new Kentucky Fried Chicken Chain.\nThat's when the price of your shares starts to go up.\nThere is demand but not enough shares for everybody.\nSome investors decide to BUY shares from the original investors for $4000.00 and your mother and yourself decide to keep all your shares.\nIf your business is making money everybody wants a piece of it and the price goes up. If nobody wants your business the price goes down.\n\nThat's pretty much how the stock market works. \nSome people are selling and some people are buying. If they buy the price goes up if they sell the price goes down.\nRemember, the number of shares are always the same and limited. (Unless the company decides to sell more shares, which is very rare)\nIf the number of sellers were the same as the number of buyers the stock price would be the same.\n\nNow Kentucky Fried Chicken has millions of shareholders.\n\nI hope this helps. \nIf you want to know more. Drop me a line.
1112722
It works - if you have a system. \n\nSure it is volatile. But that's one ingredient you do need in a market if you are trading for quick profits.\n\nOne simple technique is to examine the news release predictions, make your own mind up, make a decision of how it will affect the price and just enter the market with a close stop loss.\n\nIf you get stopped out when the data is against you, then you live to trade another day. If you don't, well that means the trade went for you and you made some moolah...\n\nGood Luck!
26759
Stocks don't always make money, that is the risk you take when you buy them.  You just hope you pick enough winners to make up for the losers in the long run.\n\nStocks don't have any memory, either...and neither should you.  What you paid for a stock last year has nothing to do with what is it worth today.  You need to forget about all that, and decide whether you think the stock will go up or not.  If not, sell it, and put your money in a better place.  It hurts, but if you can't do this, you don't belong in the stock market.
152072
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!
959280
Dow, Nasdaq, and S&P 500 are indexes or baskets of stocks.\n\nThey're used as a proxy for the various markets.  So when the S&P, Dow, and NAsdaq are up, they say the market is up.\n\nHere's how you read the #'s part.\n\nhttp://www.investopedia.com/university/tables/tables1.asp\n\n\nHere's general info on the indexes.\n\nhttp://www.investopedia.com/university/indexes/\n\nFor Thu, Dow closed at 12,103.30  \nIt was down73.24 or -0.60%\n\nToday's high was 12187.03\nToday's low was 12090.26\n\n\nHope that helps!
828864
Bids and Ask\n\nThose who want to buy shares place a price Bid\n\nThose who want to sell shares Ask a price.\n\nWhen the order is submitted and sold the price will change accordingly. The price you see is the most recent sale or buy order.
764708
Technically, it is extremely simple with today's information era to invest or trade stocks and shares. You simply need to open a trading account, fund that account, buy a stock and sell it later at a higher price for a profit. Simple?\n\nYou can sign up for an online trading account with http://www.sharekhan.com\n\nWell, that simplicity is exactly the sheep skin that hides the wolf beneath. That is exactly the expressway to wasting a lot of money.\n\nInvesting or trading the stock markets never start from opening a trading account... it starts from adequate investment and trading knowledge. There are quite a number of things you need to learn before you can even start thinking of the stock markets ...\n\n1. You need to understand how the stock market works and what it is exactly about.\n\n2. You need to know what are the different styles of trading in stocks and shares. \n\n3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.\n\nFor all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.htm\n\nAfter you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://www.metastock.com ) \n\nAll in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets. \n\nIf you want a reliable, sure fire method to trade the indian market, please go to http://stocklab-india.mastersoequity.com . There, you will also get to read about why most beginners in the share market lose all their money and how to prevent that from happening to you. \n\n\nHope these information helps.
30871
Stock is the capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity); "he owns a controlling share of the company's stock" \n\nStock exchange is ther ordered marketplace where brokers and dealers meet to buy and sell stocks of publicly traded companies on behalf of investors. Major US stock exchanges include the New York Stock Exchange (NYSE), the NASD and the American Stock Exchange. The NYSE is where most of the largest, most actively traded companies in the United States are listed. Many countries have stock exchanges where shares of companies in that country are traded.
516432
Well basically the Dow Jones or any other index for that matter, are made up of companies that are Blue Chip companies (Dow Jones) and averaged to represent the economy.  S&P is another index that usually has 500 compnaies that are averaged to represent the market as a whole. These indexes are usually taken to compare them to individual investments and how other stocks compare to them in the market. I hope this helps you get the big picture!
718061
A stock exchange  is a corporation or mutual organization which provides facilities for stock brokers to trade company stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities, as well as, other financial instruments and capital events including the payment of income and dividends.
1021121
In theory, a stock's price should be equal to the present value of all of its future cash flows.  Anything that causes the cash flows to get bigger or smaller has an effect on price.  But given that cash flows don't change, the price can still change if the interest rate changes.\n\nLet's look at an example.  Suppose that you have a company that has paid all of its bills for the next year.  In one year, it gets a $100,000,000 payment for sure.  At that time, the payment will be distributed to all owners of the firm & the firm will disolve.  How much is the firm worth?  We know it will be worth $100MM in a year.  What is the right interest rate.  Suppose is it 10%.  Can we find the value of the firm now?  Sure -- it is the amount that if we invest it at 10% it will be worth $100MM in a year.  That is, it is worth $100MM/1.1 or $90,909,090.91 now.  \n\nOK -- what happens if interest rates change.  Perhaps they go up to 11%.  Then the value of our firm changes to $100MM/1.11 = $90,090,090.09 -- losing almost $82K in value.  If rates go down, the value should go up.\n\nNext, let's look at CPI.  This is the rate of inflation.  If it increases, people will think that they need more money to have the same lifestyle in the future.  If they are worried about inflation, they will demand a higher interest rate to compensate them for higher prices in the future.  So, changes in expected inflation change the interest rates, and therfore change stock prices.\n\nWhat about the economic growth rate?  If the economy grows faster than expected, then maybe that $100MM that we thought the company was going to get will be higher.  A higher payment translates into higher stock prices.\n\nAs for employment, it turns out that the employment rate is associated with growth.  If a lot of companies are hiring, then there will be more money spent by the new employees, and there will be more produced by those new employees, so demand for goods goes up.  This causes an increase in the expected profits, and higher stock prices.  It isn't quite so simple, though.  If there are too many people working, then the demand for labor causes higher costs and lower profits, which causes stock prices to decline.
739164
You are correct.  If the price of the stock rises, the price of the call option will rise.  You can sell your call option and profit without having to exercise it.  The profit will usually be the same wether you sell the option or exercise and buy the stock and resell it.\n\nhth
652874
For every share sold, there is a share bought; \nfor every seller, there is a buyer.\nThe money that you lost might have gone to a short-seller who first sold the stock at $40 and then bought it back at $30, or it might have gone to somebody who bought the stock at $30 and will (in the future) sell the stock at $40. (By the way - the company itself might have been the buyer!)\nBottom line is that the $10 did NOT go INTO your pocket, it came OUT of your pocket!
726319
Dow, Nasdaq, and S&P 500 are indexes or baskets of stocks.\n\nThey're used as a proxy for the various markets. So when the S&P, Dow, and Nasdaq are up, they say the market is up.\n\nThe plus/minus is the change in the value of the index vs. the prior trading day.\n\nHere's how you read the #'s part.\n\nhttp://www.investopedia.com/university/tables/tables1.asp\n\n\nHere's general info on the indexes.\n\nhttp://www.investopedia.com/university/indexes/\n\nFor Fri, Dow closed at 12,342.56 \nIt was up 36.74 or 0.30%\n\nThe day's high was 12342.56 (yes, closed at the high!)\nThe day's low was 12277.40\n\nHope that helps!
636276
when you short sell a stock, your broker will lend it to you. The stock will come from the brokerage's own inventory, from another one of the firm's customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. Sooner or later you must "close" the short by buying back the same number of shares (called "covering") and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.
783817
Sorry to say but there is no such equation.Stock prices are not determined by applying equation of previous days high, low prices. If u want to know the price of any particular share, u have to study the company, its financials, its future strategies and all that. Only then u can guess in which direction the company's stock price will move. Beside this  other factors like ecomonic factors, market regulations etc also have effect on stock market. Eg. if govt put ban on export of sugar then all sugar exporting companies will be suffered and their stock prices come down despite the company is showing good results in past. So do some homework on companies to PREDICT their opening prices
661627
A stock market is how much a companies shares are worth at the time. Low means that they are not selling for a lot, high means that one shares costs more than it did previously. \n\nThese fluctuations are based on events going on in the company and how much people are willing to support them. Often stocks drop when people either see their stocks are worth more and want the money at the time or the company is having problems.\n\nHigh often occurs when a new product has been developed and people want in on the profits that company is gaining.