What is a share?
A share is nothing but a company's ownership. In every business, they need some money for their business expansion. So they will give some percentage of share to the public and get the money for their expansion. These shares are distributed to the public through Initial Public Offering(IPO). We will discuss this later.
What is Stock Exchange?
This is where the buying and selling of shares will occur. Once the shares are distributed to the people some people will try to sell that share to another person, some will try to buy those shares from the shareholders. So this stock exchange acts as a medium to do this action. In India, there are 2 exchanges(Bombay Stock Exchange(BSE) and National Stock Exchange(NSE))
Why share price changes?
There are a lot of people who will do buy and sell in the share market. The share price will get fluctuates based on these buy and sell actions. When buyers are the more aggressive price will go up or when sellers are the more aggressive price will go down. This aggressiveness is because of human emotions. Buyers will think that this share will go up and sellers will think that this share will go down.
Human emotions will depend on live happenings in the world. Investors or traders should be aware of those happenings. Consider a listed company Comp1 is doing hotel business and during the covid lockdown, their business will get affected. So people already holding this company's share will get afraid that this stock future may not be bright. On the other hand, buyers will think like this share will have a bright future and is available at a low price because of the lockdown. So it depends on their point of view or their emotions.
Let us discuss other topics in upcoming articles
Disclaimer: This is my personal thoughts and doesn't consider this as investment advice. Please do your research and consult with your financial advisor.
Comments
Post a Comment