Investing for Beginners , investing

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Ralph Waldo Emerson

Investment Dictionary


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Stock Price

 

A stock price is the last price of a share (stock) that was traded in a stock exchange for a particular stock. If stock exchange is closed at the moment, then the last stock price will be closing price for that stock. If stocks are not listed, then OTC market do not completely represent stock price and in this case we should talk more about the stock market value but not the stock price because value and price have different meanings. 

 

A stock price in the market is a result of equilibrium of demand and supply of a particular stock. If liquidity of shares is high, then stock price rarely stays at the same level and is always changing reacting to market news and financial environment. Stock price normally is price of one share and market capitalization shows the price of all issued shares. 

 

The stock price depends on two groups of factors:

  • Inside qualities of the company makes the largest impact to the stock price and stock value as well. Inside qualities refers firstly to the financial results of the company, recent developments, important news, financial health, new products, market share changes, valuation multiples,  management quality and many other.  
  • Environment also does huge effect (sometimes even stronger) to the stock price. That includes economical factors, the stability level of financial markets, confidence of investors, attitude to the stocks (when investors are bullish, most of the stocks are rising) etc.

 

 






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