Stock Markets 101

There are just two terms which drives the Stock market. Demand and Supply. Everything is derived from the two terms. A Stock market is a place where prospective buyers meet prospective sellers. Companies need money for expansion or to improve its asset quality. When this money cannot be collected via banks or lending houses, companies offers ownership to public and invites them through advertisements. Investment banks valuates the company and issues a initial price in agreeement with the company. Then the shareholders buy/sell the shares in secondary market depending their performance. This creates a demand and supply of shares in secondary market and the whole fluctuation of the market.