Stock market explained

Stock market, a word, widely used in the world of business. What even is the stock market? Why do people sell shares? How does it work? Well, this blog will give you a clear idea of what the stock market is and will answer all your questions.

What is the stock market?

It is a world of money, numbers, businessmen and businesswoman, shares, companies etc.

First we must know what stocks are, stocks are also known as the shares of a company which give shareholders voting rights and return on investment also known as dividends. The stock market is where individuals and firms come together to buy and sell shares in a public venue. It’s that simple! Nowadays, we all are developing, so it is mostly happening online. Setting up a big business needs a lot of capital and selling shares is the best way.

How does it work?

The prices of shares on a stock market can be set in a number of ways, but the most common way is through an auction process where buyers and sellers place bids and offers to buy or sell. A bid is the price at which somebody wishes to buy, and an offer is the price at which somebody wishes to sell. When the bid and ask coincide, a trade is made.

Stock market is the best example of the market of demand and supply. For every stock transaction, there must be a buyer and a seller. Because of the unchangeable laws of supply and demand, if there are more buyers for a specific stock than there are sellers of it, the stock price will trend up. On the other hand, if there are more sellers of the stock than buyers, the price will trend down.