How does the stock market work? Who decides the price of stocks? What is the logic behind the valuation of stocks?

The stock market is a platform where investors buy and sell shares of publicly traded companies. Here's how it works and how stock prices are determined:

Stock exchange 

Supply demand 

Bid & ask 

Market participants 

Valuation of stock 

Overall, the stock market operates as a dynamic marketplace where prices are determined by the interaction of supply and demand, influenced by various factors and participants. The valuation of stocks depends on the perceived worth of the underlying company, which is subject to interpretation and analysis by investors.

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The stock market is a platform where investors can buy and sell shares of publicly traded companies. Stock prices are determined by supply and demand dynamics—when more people want to buy a stock, its price typically goes up, and vice versa. The price of stocks is influenced by various factors, including a company's financial performance, industry trends, economic conditions, investor sentiment, and geopolitical events. Investors analyze these factors to determine the perceived value of a company's stock, using methods such as fundamental analysis (examining financial statements, earnings, and growth potential) and technical analysis (studying price patterns and trading volume). Ultimately, the price of a stock is a reflection of what investors are willing to pay for a share of ownership in a company, based on their expectations of future earnings and growth potential. read less