Stock Market Price is the price at which a particular product is traded in its respective market. It is influenced by the same factors of supply and demand that influence all commodities.Most price movements in the stock market are caused by speculation, a way of trying to anticipate the price of a particular stock at some point in the near future.
When a large number of operators in the market speculate on a particular stock, the immediate outcome is a rise in the demand for that particular stock.
This results in said stock becoming scarce in the market, pushing up its price.
This is the price at which trade in the stock commences every day. Stock price will rise or fall from this initial price depending on the demand and availability of the stock in question.
This is the price when the day’s trading is ended. It is also the opening price for the next trading day. The closing price of a stock indicates the stability of a particular stock – it would be considered unstable if the difference between the opening and closing prices is very large.
Closing prices are the basis of stock market indices, as market analysts mainly study the movement of closing prices to determine the quality or strength of stocks. When the price of any particular stock shows wide disparity in its opening and closing prices over a fairly long period, it would be classified as an unstable or volatile stock. On the other hand, when the price of a particular stock displays very little disparity between its opening and closing prices and also shows steady rise over long periods, it is considered a safe stock and is rated highly by the analysts. Such stocks are always in demand and normally command high prices.
After a company successfully completes its IPO (Initial Public Offer), it is allowed to trade in the stock market(s) it has applied for. However, the market regulator in consultation with the respective stock market decides at what price the stock could commence trading in the stock market. This price is decided after a period of careful monitoring of the stock’s movement following the IPO.
Last Updated on : 26th August 2013