How does the stock market work

Posted by Ayesha Jaiswal on July 11th, 2017

The stock market is a leading market in India, many people started believing in the stock market and investing their valuable money in order to gain profit on it and to become more wealthy through investing in market but on the other side some people still confused how to invest and how stock market actually works in India.

If the thought of investing in share market scares you that how to earn money through investing, you are not alone; there are many people who still don't know how the stock market actually works.


To earn a profit you must have knowledge about the market and latest trends of market, if you can afford, you can hire a financial expert for you who will provide you better stock tips, it will help you to trade in a smart way.


How stock price determines –

The stock price is a value on which share of a company traded in stock exchange.

A company's total value, its total market capitalisation.The stock price of a company depends on its performance in the market, it freely depends on a company's movement in the market.


Stock price of a company depends on the following factor-

1.Industry performance – Financial result like annual reports, quarterly reports of a company determine changes in prices of stocks as the performance of a company create an impact on stock price.


2.Market direction – There are two types of direction on which stock market goes on called bull market and bear market. 4 out of 5 stocks are affected by the market fluctuations.If the market is a bullish market, then a lot of stocks make new high because in the bullish market lot of people do trading, it less happens in the bear market.


3.Changes in economic policy – If a new government comes, or any changes made in economic policy, it also creates impact on pricing. Sometimes these changes may be good for the company but sometimes not, like recently new changes came into existence called GST, it will also bring new changes in economic sector as well as stock market.



How it works -

For stock market trading there must be buyer and sellers.Buyer can place “market order” to purchase a stock at a current price and “limit order” if he wants to buy a stock when it reaches a certain position. But the buyer and seller must be agreed for the transaction and it should be legal.


The stock market is the best place where anyone can start trading by fulfilling required formalities. If you are new in the market and confused how to start you can take a suggestion from leading financial expert for best stock tips, stock futures tips and other trading tips. They provide expert tips with an aim to boost your profit in share market.

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Ayesha Jaiswal

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Ayesha Jaiswal
Joined: May 20th, 2017
Articles Posted: 39

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