What determines the EXACT values of stocks on the stock market?
I understand how the stock market works in general. My question is how the exact value of a given stock is calculated.
Is it some kind of average of all prices that stock is being sold for? Is it determined by a person or team of people? Is it some kind of other algorithm constantly updated by international information? If so, who decided what the algorithm should be? Any other info would be greatly appreciated!
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Answer by Mohammad
Prices are determined by buyers and sellers. Buyers give their quotes(price and number of shares of a partucular company to be purchased), electronically(on their computers) through the Trading Platform of their brokers to stock exchange. Likewise, sellers give their quotes(price and number of shares of a particular company to be sold). The computer of the stock exchange matches the 'sale' and 'buy' quotes, and strikes the transaction. At any given time, there are many buy and sell quotes on the computer of the stock exchange.
Please also visit the websites of NSE and BSE for more information. http://www.nseindia.com/index.htm
www.bseindia.com
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