Share Price or Stock Price is the compass in a stock market. You can have the whole ship to yourself but without a compass and a guide, your ship will get lost in the middle of the ocean.
What is Share price or Stock Price ?
The Stock Price or any other Securities changes every Seconds due to several factors. Demand and Supply are a most important factor which Force market when there is Buying and Selling Multiple times throughout the Market trading hours. Demand and Supply share inverse relationship. The Company’s earning also changes the price, the action of price happens when Company’s Share value Increase or Decrease, and according to it, the Price will reflect in Stock Market. It is impossible to predict the market movement even if we are clear on Technical Analysis and Fundamental Analysis, Price will find its reason to rise and fall, no one can actually predict future movement. Sometimes new announcement from the Company also change Price like eg any news related to Expansion, Board Member recruited or Resigned, Company gets new Contracts, Debt of Company, accounting errors or scandals. Crisis in our Economics can be a major breakdown and it can lead to price change. Let’s see some major factors where the price can change in Stock Market.
A share price can be described as the price of a single share out of a number of tradable stocks of a company, derivative or another financial asset. In Layman’s terms, the share price is the highest amount an individual is willing to pay for a single stock, or the lowest amount that a share can be bought for.
The stock market is vast and billions of traders change hand every day. Fluctuation in stock prices and changes in company value can depend on numerous factors. In some rare cases they can be so random it is hard for even experienced analysts to calculate the future of a company.
These are the key factors that influence the sale of stocks and volatility in prices.
Demand and Supply.
Demand and supply are two faces of the same coin. With greater demand, the value of stocks rises and causes the market to go into a frenzy and pushes towards lesser supply. With greater supply, the demand is lower and results in lower stock prices.
Overbought stocks can indicate many things. Sometimes it can mean investors have got a hindsight on the future prices and buying stocks to control the price. In other cases when the oscillator reaches its upper limit it indicates that the stocks risk getting overvalued and might experience a pullback. A stock that has gone through sharp upward movement over a course of time is often regarded to be overbought.
Overselling of stocks leads to increased volatility in the market and less demand, which in turn leads to lower prices. Overselling of stocks is most likely an indication of panic or preparation for a future market trend that might occur.
Block and Bulk dealers.
In share market, the terms block and bulk deals go together.
A block deal is a trade with a minimum of 5 lakh shares or a value of at least 5 crores completed in a single transaction on the “Block Deal Window” which is opened for 35 minutes in the morning. They usually take place when the buying and selling party reach an agreement to buy or sell shares at an agreed price and inform the stock exchange.
A bulk deal, on the other hand, is where the total number of shares bought or sold is more than 0.5% of the number of equity shares of a company. They are a normal occurrence and transactions are carried out anytime within the trading hours. They are mostly market driven.
International market effects.
The stock market is a collective entity. The Indian stock market is the Indian branch of the whole system with Indian traders and companies putting their stocks for trade. If there is a plunge in the International market or a rise in dollar value it indirectly effects Indian companies as well. There are many website to track News related to International Markets like Investing, CNBC, etc. Some companies list their stocks in both International and Indian markets and thus a drop or gain in prices affects both India and foreign. The recession is a unique example of this phenomenon which affected practically every country on the planet at once.
Psychological factors influencing the stock market and stock price is a controversial topic. It is hard to determine what actually goes on through the minds of the traders and what causes them to panic sell or panic buy. Sometimes some new IPOs are overhyped and lead to traction and demand that shouldn’t be the case. Even rumors play a strangely important role in phycology. While they are existent, marketers are advised to see through the mirage and take decisions logically to get the best returns.