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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The value of stocks is also based on how many people wish to sell/buy them.
If there are lots of people that want to sell but only few that want to buy the price will drop. The few people willing to buy will do so by buying the cheapest available stocks and the rest will wait for new buyers to appear. This will make the price drop if many more sellers appear and only a few more buyers, the new sellers will offer their stocks at lower price to l make sure to sell them, and the buyers yet again will buy the cheapest stocks. This causes the prices of stocks to go down
It works the same the other way. If many people wish to buy and only few wish to buy they will sell to the highest bidder, driving the price up.
So the stock price is mainly influenced by supply and demand of the stocks rather than company’s profits.
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