how does a stock market work? pls explain in simple lang avoiding tech words.?
356096
when a company grows too big and need additional money to expand. the company will have to sell part of the companies for more money to expand. in order to sell parts or all of the company they have to estimate the worth of the company and further  break down into unit of share. each share worth is determine by a complicated series of accounting and estimates.once a price is determine, the company will have a initial public offering (known as IPO) in the stock market. after that the worth of each share determine by the demand and supply in the public. of course the annual report and estimate how the company will do yearly affect the pricing of the shares. a lot has to do with speculations or rumors....
291688
A stock market is a market for the trading of company stock, and derivatives of same; both those securities listed on a stock exchange as well as those only traded privately\nMore information below.
142457
Investors buy shares of stock in a company and are therefore owners of the company.  Many companies are private where perhaps a dozen people own all the shares but a large number of companies are publically traded.  Although direct trades of stock are legal, most investors place their trades (buy or sell) through a stock broker who charges a commission for each transaction.  You can trade on line through electronic discount brokers for as little as $7 per trade (buy or sell).  See Scottrade for example.  You can make money if you buy the stock cheap and sell it after the price appreciates.  If you choose the wrong stock and the price goes down you can lose money and if the company goes broke you can lose all your money.\n\nMany investors prefer to buy shares in a Mutual Fund that invests in perhaps 50 or more different companies.  Many (but not all) Mutual Funds are operated by experts who know how to invest wisely in stocks.  Also, if one of their companies performs poorly or goes broke the remaining good stocks can make up for the loss.  It is possible to invest in "no-load" Mutual Funds by contacting them directly or through a stock broker who will charge commissions for your transactions.  As an example T. Rowe Price has no-load\nfunds specializing in many different types of companies and risk categories.\n\nYou can invest IRA funds in a Mutual Fund and have the earnings compound tax free.  If you invest say $4000, multiply that by 1.1 as many times as there are years before you retire and you can see how it will grow and grow at a 10% annual rate (not guaranteed).  And that is only one deposit.\n\nI'd recommend investopedia.com, especially their dictionary, to better understand any investing terms you encounter.  Good luck.
86595
Not only you can profit from buying low and selling high - you can also profit from buying high and selling low! does that blow your mind? well welcome to the world of trading stocks for a living.\n\nTraders profit from the markets from following trends be it a short term trend that lasts for a day or a week or a longer term trend that lasts for weeks or months and even years.\n\nGood Luck!
303672
Check for solid fudementals, (is the company making money, does it have low debt, are sales increasing, etc.) and Technical indicators that are telling you the stock is going up, ie: price, MACD, Chaikin Money Flow, stochastics, etc.  \n\nStart with Investors.com, the site has a Stock Checkup, a great tool for checking fundamentals on any stock. \n\nFor a more detailed study of Technical Analysis go to StockCharts.com, pay particular attention to the Bollinger Bands, Moving Average, Volume, RSI, the MACD (Mac-D), The Williams %er, Stochastics, and the Chaikin Money Flow.  \n\nThen check out StockTA.com, it is also an excellent Technical Analysis site, with charted Fibonacci resistance and support lines and will tell you if the stock is bullish or bearish in the short, medium and long run.  The site also has an extensive Candle Pattern Glossary and a fantastic technical screener. \n\nThe above sites do have premium services, but all the services I mentioned are free.  I've been using Elliot Wave and Fibonacci's to help refine my in and out points.  StockCharts.com's "ZigZag" overlay helps me plot and count the waves and that helps determine where I am in the overall pattern. \n\nBasically I find interesting stocks through the screens on Investors.com or StockTA.com, run them through the Stock Checkup at Investors.com, if they measure up I'll run them through the Analyisis & Fib Analysis at StockTA.com and do an extensive chart study at StockCharts.com, examining the 2 yr, 1 yr, 6 mth, 3 mth, 1 mth & 5 day.  I'll also do my due dilligence, studying the profile, key statistics, headlines, etc. through Yahoo Finance and web searches.  If it all measures up and the stock is in a base or in a pull back and it's starting a wave 1 or wave 3, it's time to buy. \n\nSo, to sum it up; you're looking for solid fundamental indicators, and Technical indicators that tell you that the stock is bullish (going up).\n\nI heartily recomend studying the How To Invest section of Investors.com, the Chart School at StockCharts.com, and the School at StockTA.com to further your investment education.\n\nRemember, when investing always protect your downside with a stop loss or a trailing stop loss.  \n\nGood luck, hope it helps.
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!
488412
In Share market you are directly buying shares (stocks) of a particular company and you become the stock holder.\n\nIn Mutual Funds you are giving the money to a fund company and they are investing on your behalf. In this case you are not issued any share but you are issued units which you can track through the Fund Company's NAV. Secondly mutual fund companies invest in different companies and are not just limited to one single comapny so the risk amount is quite less.
559087
Its a market where people try to buy share - Share is nothing but a holding in a company. The value of a share is decided on the baaisi of various factors particularly current and past performance of the company.\n\nI guess you just have started looking at share market..So I would recommend you to read some share market related books before you start investing. Remember the market is very lucrative but at the same time is very dangereous.
268
Shorting a stock (or selling short) ideally works like this:\n\nWhen you think a stock is going to go down...\n1. You borrow shares of stock you don't own, typically from your broker.\n2. You sell those shares at today's price.\n3. You wait for the stock to go down.\n4. You buy the same number of shares back at a lower price.\n5. You return the borrowed shares.\n6. You pocket the difference between the buying and selling price.\nSteps 1 & 5 are actually done automatically when you issue a short sale order with a broker.\n\nThe advantage of shorting is that you can make money when stocks are going down.  (With a normal stock purchases, you only make money if the stock goes up.)\n\nThe disadvantage is that in theory, you could lose an unlimited amount of money.  For example, if the stock goes up to five times its original value, you've just lost four times your investment.  (With a regular stock purchase, the most you can lose is the amount you originally invested.)
659312
a gaurantee? the stock market has been built on the risk of people spending their money and hitting it big... then there are the stories of people jumping from the 122nd floor after they lost it all of course.\nso you have to factor that in.\nnothing good is free. or everyone would be doing it.\nnothing good/great in life comes without a risk.\neducate your self if you plan to do this. investigate the company, market, and the stocks. it takes time  to know what is the right direction... and even then you may be wrong... but being prepared to make an educated decision is your safest bet. and thats what the stock market is....a bet\ngood luck tho!
1140743
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.
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.
344986
Nothing could be more simple. First you open an account with a brokerage firm. On line brokers charge very reasonable commissions. You normally have to make a deposit of at least $500. But in my oppinion that is not really enough to begin with. You can purchase stocks on margin, which means you only have to fund 50% of the purchase price and the brokerage firm will lend you the rest, at an interest rate of course. \n\nNext, you pick out a stock you want to buy or sell. You can do either. If you do not own the stock, selling it is called short selling. That means that eventually, you will have to buy it back. You then make your trade and wait for the price to go up or down. At some future time, maybe a few minutes, maybe a few hours, maybe a few days, or weeks, or months, or years, you will decide to sell the stock or repurchase your short position at either a gain or a loss. \n\nIt is that simple. If you hold the stock for at least a year and you have a gain, you will be taxed at a rate of about 1/2 the normal tax rate. On short sales, gains for some odd reason are always taxed at the full rate.
722283
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.
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
1033309
Are you talking about the futures market? Options? ETF's on gold stocks? Gold stocks themselves? These, to me, are the market. Or are you talking about the spot market?\n\nThe gold market works like any other free market. Like the stock market. If somebody "controls" it, what would be the point of investing?
234631
The stock market will go up in the next few months.\nThe stock market will go down in the next few months.\n\nThe key is to make money regardless of the markets direction.\n\nJ