how does the real stock market work.please explain the concept of stocks.?
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A share of stock represents an ownership stake. A significant ownership stake (lots and lots of shares) can allow a shareholder (or a group of them) to take control of a company or otherwise influence change within the company.\n\nThe shares are traded on exchanges, and the price is determined by market forces (greater numbers of traders trying to buy shares bids the price up, whereas traders trying to sell shares will cause the price to go down).
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Stock change is the difference between 2 prices.  The first price is usually the last price of the previous day or the first price of the current day.  The second price is the last price paid for the stock.  Subtract the first price from the second price to find the stock change.  Don't forget that your stock prices may be delayed depending on where you are getting your numbers.\n\nVolume: The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller then the volume for that period increases by 100 shares based on that transaction.
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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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In simple words it is when stock market start gaining after a huge lose or decline.\nLet me explain in better way.\nSuppose the stock market in loosing points every day for the whole week and in next week it suddenly gained some points on Monday. We can say the market has done some correction on Monday.\nThanks and Good luck
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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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The stock market is simply a meeting place of buyers and sellers.\n\nThe price at which stocks are sold is simply where they agree on the value of that stock.\n\nIf there are an equal number of buyers and sellers with an equal proportion of sentiment then the price will never change.\n\nWhen a stock price changes it's because there is an oversupply of buyers or sellers.\n\nSo in the case of a stock price dropping, more people want to sell than buy and therefore the price is pushed down by those sellers until it reaches a new equilibrium.\n\nThe cause of people selling is varied.  Some people sell because of a bad newspaper article.  Some people sell because they want to buy a new car.  Some mutual funds sell because of a reweighting of their portfolio.  Some traders sell because a particular level has been reached.  Some people sell because of change in the fundamentals of the company (sales, profits, market competition etc.).  There's probably another 100 reasons that could be added here.\n\nOne thing about the market is that it's like a herd and often movements cause more movements in the same direction.\n\nCheers,\nRichard.
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there is no "correct price" of a stock. stocks trade on many factors. technicals, fundementals, emotion, outside events unrelated to the specific company, manipulation, etc.\n\nyou really need to educate yourself on the many areas I mentioned. good luck, most people spend a lifetime at it and never really get to the answer you seek.
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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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Stock trading is the practice of buying and selling stocks. There are long term stock traders or investors that buy a stock on it fundamental prospect and keep it for years. Short term stock traders are more of the speculative kind, they keep a stock for a few days or even hours, to gain a few percent. \n\nTake a look here for more insights and examples:\nhttp://en.wikipedia.org/wiki/Stock_trader
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The numbers coming out of a stock exchange will be prices for stocks and index values. \n\nReported stock prices are typically listed as bid (what someone offered to pay) ask (what a trader gave as a price) or last (the price at which the last transaction happened)\n\nIndices are based on a collection of stocks that are chosen to represent some sector/geography/size of stock. They are designed to show the trends in an industry or geography, rather than the results of an individual company. This link shows the methodology for Dow Jones Indices\n\nhttp://www.djindexes.com/mdsidx/index.cfm?event=showAvgMethod
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You can only invest in stocks that are of publicly traded companies.  Each of the above are private entities (private companies).
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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.
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Short selling is the selling of a stock that the seller doesn't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. That may sound confusing, but it's actually a simple concept. \n\nHere's the skinny: 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.\n\nMost of the time, you can hold a short for as long as you want. However, you can be forced to cover if the lender wants back the stock you borrowed. Brokerages can't sell what they don't have, and so yours will either have to come up with new shares to borrow, or you'll have to cover. This is known as being "called away." It doesn't happen often, but is possible if many investors are selling a particular security short.\n\nSince you don't own the stock (you borrowed and then sold it), you must pay the lender of the stock any dividends or rights declared during the course of the loan. If the stock splits during the course of your short, you'll owe twice the number of shares at half the price.\n\nAlso, because you are being loaned the stock, you are buying on margin. In fact, you have to open a margin account to short stocks. Your broker will charge you interest on the loan and you are subject to rules of margin trading.
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They don't really buy the stock.  Normally, they can get stock options granted to them as part of their compensation package.  Usually, though, the exercise price of the options is above 0.  This doesn't really matter.  They're still getting "free" money in that they don't have to buy the stock on the open market.
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Stock market indices are calculated from the quotes of the stocks of which they are composed. It is therefore a sort of average. If an index rose 1% to 445, then it just means that this average stock price rose one percent.\n\nThe number of stocks included and the exact way the calculation is done, is different from one index to another. \n\nFor instance:  the Dow Jones is composed of 30 stocks, the 30 biggest companies in the US and the value is just the sum of the of the values of the composants, multiplied by a suitable number.\n\nThe SP 500 contains (you guessed it) 500 stocks, weighted by their size, and is therefore more representative for the economy as a whole.\n\nOther indices take also in account the number of stocks in circulation, the amount of stocks exchanged each day, etc.
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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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In financial markets, stock is the capital raised by a corporation through the issuance and distribution of shares.\n\nA person or organization which holds share of stocks is called a shareholder. The aggregate value of a corporation's issued shares is its market capitalization\n\nIn finance a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REIT's. In British English, the usage of the word share alone to refer solely to stocks is so common that it almost replaces the word stock itself.\n\nA share is one of a finite number of equal portions in the capital of a company, entitling the owner to a proportion of distributed, non-reinvested profits known as dividends and to a portion of the value of the company in case of liquidation. Shares can be voting or non-voting, meaning they either do or do not carry the right to vote on the board of directors and corporate policy. Whether this right exists often affects the value of the share.