Supply and Demand in the Stock Market

A stock is partial ownership of a business or company. As always, there is a risk in trading stocks and shares. People have to consider many factors when they purchase a stock, especially the financial structure of companies. So people would buy a stock that bring a lot of profits and this factor makes a stock more valuable and also makes people inspire to buy. The prices of stocks are determined by supply and demand in the stock market.

A stock has a limited quantity same as other market products. It means that they have a number that the amount of what they bring out and also has a number that distribute in the market. If the supply of a stock increased, the value of the stock falls down so the price goes down. However if the supply drops, the price goes up. For demand, if the stock becomes more popular and everyone wants to buy it, the price increased. If demand goes down, the price falls.