Here is a visualization of the How stock price works!
- At the most fundamental level, supply and demand in the market determine stock price.
- Price times the number of shares outstanding (market capitalization) is the value of a company. Comparing just the share price of two companies is meaningless.
- Theoretically, earnings are what affect investors’ valuation of a company, but there are other indicators that investors use to predict stock price. Remember, it is investors’ sentiments, attitudes and expectations that ultimately affect stock prices.
- There are many theories that try to explain the way stock prices move the way they do. Unfortunately, there is no one theory that can explain everything.
Credit goes: setofskill.com
Are you looking for NSE paid calls? Want to get premium trading alerts and unlimited access to Moneymunch? Join today and start potentially multiplying your net worth: Premium Stock & Nifty Tips
Premium features: daily updates, full access to the Moneymunch #1 Rank List, Equity Research Reports, Focus List portfolio of 50 longer-term stocks, Premium screens, and much more. You will quickly identify which stocks to buy, which to sell and target today΄s hottest industries.
Have you any questions/feedback about this article? Please leave your queries in the comment box for answers.