How the market price of a particular share at particular time is being calculated?
Posted on Oct 02, 2009 under Time Share | 5 Commentsi am very new to share trading.i want fundamentals of share trading
The price is not "calculated". It’s whatever someone is willing to sell for at that moment.
October 3rd, 2009 at 12:56 am
It is the price at which each transaction takes place; so it continually changes.
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experience.
October 3rd, 2009 at 1:40 am
The price of particular share at particular time depends upon demand and supply. If there are more seller less buyer the result price are down and if there are more buyer of particular share and less saller the price goes up.
As you are new in share trading you should watch the market properly, see the trend of particular share before investing. You must deal in Nifty shares or Blue chip company shares only. more before investing you must know the fundamental about the company in which you are going to invest your money.
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October 3rd, 2009 at 1:48 am
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October 3rd, 2009 at 2:01 am
The price is not "calculated". It’s whatever someone is willing to sell for at that moment.
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October 3rd, 2009 at 2:08 am
The market price for a particular share of stock at a particular time is not calculated. The price is determined by what the buyer wants to pay for a stock and what the seller of the stock wants to sell it for. The actual price of the transaction is determined not by a calculation but by what the buyer pays the seller for the stock. The price fluctuates throughout the trading day dependent on the volatility of the stock market as a whole and by the volatility of the particular stock by itself and its relationship to the stock market as a whole. As an example just pick any stock that shows a bid and an ask price. The bid price of the stock is what the buyer is offering to pay a seller for the stock. The ask price is the price at which the seller wants to sell the stock to a buyer. When there is a match of the bid with the ask price, the sale takes place with the buyer paying the price the seller is asking for the stock. There can be large fluctuations between what the seller receives for a stock when the seller places a market order to sell the stock. In the case of a market order, the seller leaves it to whatever price a buyer is willing to pay for the stock at that particular time, and that price may be a lot less than what he may want to receive for the stock depending on what the bid price is at the time the market order is placed. It has happened that a seller may think he will get $100.00 for a stock because the stock was selling at the time for $100.00, but when the seller places a market order to sell, the bid price at that particular time the seller places the market order is $90.00. The seller will receive $90.00 for the stock rather than $100.00 only because the bid price at that time was $90.00. Were the seller to watch the next trade right after his, the bid price may be $105.00. For that reason it is not a wise idea to sell a stock at a market price unless there is a definite upward trend in both the bid and the ask price of the stock and there is enough volume in the shares being traded at the particular time to indicate increasing volume activity in the stock at a particular time.
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