How Stocks Are Priced In Stock Market

August 4, 2009

Stock prices, to a certain extent, are determined by the confidence of an investor that is based on either a real or a perceived performance. The financial status of companies are reported on a quarterly basis when their cash flow, sales, and earnings are disclosed. The worth of a company is based on its financial status but it can be overrode or undermined by the speculation of the investors.

Rumors spreading in the stock market usually affects the fate of the stocks. For example, an ongoing rumor stating that a particular company is planning to make a strategic move will cause investors to come flocking just to buy stocks from that company. The principle of supply and demand applies in the stock market. A sudden upsurge in the interest of investors will cause the stock prices to rise while a fear among investors will cause the prices to plummet. The worth and the performance of a company are still considered to be the biggest factors in the determination of stock prices.

Stock prices can be found in the daily market summaries of newspapers or online sources. They provide information about the current prices and market movements around the clock. Stock brokers also provide quotes which can be accessed either via the Internet or via a telephone.

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