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

336 views

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?

In: 0

10 Answers

Anonymous 0 Comments

The value of stocks and shares is set by what the last person paid to buy them. Financial institutions have direct access to the market, they place a bid to either buy or sell (10000 shares at $100 each) and if the bid goes through then that sets the price. For large companies the price is fluctuating constantly. For penny stocks where volume can be low the price may only change every few hours or even days.

Private individuals don’t have direct access to the market, they go via market makers. Private investors don’t generally sell shares in a quantity that interests institutions, and it may be difficult for a buy or sell to be fulfilled for a private individual because it requires a matching buy/sell from other individuals. The market maker keeps a float of shares, they buy them from private investors slightly below market rate and sell to private investors at a slight premium. They make money from the small price delta.

You are viewing 1 out of 10 answers, click here to view all answers.