Brief on How Stock Market Works

Posted on Posted in Stock Market

You know that stock markets are secondary markets. Here, with potential buyers, existing owners of shares can execute. You must significantly understand that the corporations listed on stock markets. Do not buy and sell their own shares on a regular basis.

Since the stock market is secondary, so when you buy a share of stock. This means, you are not buying it from the company but you are buying it from some other accessible shareholder. Similarly, when you sell your shares, you do not sell them back to the company. But you are selling them to some other investor.


Volume is the number of shares change hands in a day. Various stocks on major exchanges have millions of shares issued. Which means potentially thousands of investors in shares may decide to buy or sell on any particular day. You must additionally perceive that a stock that has millions of daily volumes is alleged to be engaging. This is because; they can easily buy or sell their shares whenever they wish.

Now let us know what is stock? In actual, shares are issued by companies to raise cash and then continues to trade on an exchange. Owning shares are made attractive when the overall stock has risen over the long-term. You must also be aware of some additional perks like dividends, profit potential, and voting rights. Though, share prices also fall, which is why investors typically choose to invest in a wide array of stocks. They only risk a small percentage of their capital on each one. At any time you can buy and sell the shares, assuming there is enough volume available to complete the transaction. This shows that investors can cut losses or take profits whenever they wish.

You must take the help of some experienced technical analysts, in order to generate accurate future tips.

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