How do we know the value of stocks shares on real time?

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You can check the value of stocks share online, in apps on your phone etc… But what is that value really? And how do we know on real time how the value has changed.

For example, if a company increases profits its value in the stocks will increase, but what is recording the incomes of the company? Is it connected to a similar system that the bank uses to store money? Is it similar to an internet network?

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Anonymous 0 Comments

People have already perfectly summarized how you get the trading price instantly, but I’d like to talk a bit about the difference between price and value.

Here the misconception in your question is that we know their value. We are shown by the exchanges their trading price at that time.

For example, how much is the life of a dog worth (its value)? Probably priceless. Nonetheless, if you wanna buy a golden retriever it has a price. But what you’re paying is actually an spread over the cost of breeding and delivering the golden retriever.

For companies both value and price can usually be expressed in monetary sums but they are different things. The EV is what it is worth, and for it Economics and Finance may have some standardized formulas and ratios but it is still an arbitrary way to value the company.

You could say that the value of company is what the last buyer was willing to pay. But there is other factors as crisis, premiums and so forth.

The price you see on the internet is the price for one share. A block trade or the sale of whole company may induce in a premium or a discount. See e.g the twitter deal.

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