Why Share Prices move UP and DOWN | How Stock Market works? - YouTube

As seen in movies and those who got their Demat account opened

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It was Yamraj once. Actually, it was written time to meet Yamraj at the door.

It is written please bring 229.87 with you. Does someone ask how to bring Rs.87?

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As seen in movies and those who got their Demat account opened

they must have seen how every company shares go up and down in real-time.

Price changes at a wink. Why is it so?

Today in this video I will discuss in details why share price goes up and down

and after understanding everything you will know how to make money in the share market.

That is how to create wealth

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[Intro Music]

Let's discuss why the shares price fluctuates. If you have studied economics during school,

You must have heard two words that are Demand and Supply.

And prices of everything in the world depends on its supplies and demands.

Let's take an example of a painting auction. There's 1 painting and 100 buyers.

So everyone starts auctioning one by one like 2 lakhs, 10 lakhs and

finally, after everyone's auctioning, the price of 3 crores is set and it is sold.

You must have heard such news and its the opposite is also true.

Say there are 100 paintings and 10 buyers in the auction

and no buyer is interested in anyone painting and price max price is 2 lakhs.

So ultimately seller sells the painting at 2 lakhs only and on analyzing

In both, the scenario, supply was less in the first. That is there was only 1 painting.

and demand was very high as there were 100 buyers. That's why

price went high because everyone was ready to pay the high price.

And in the 2nd case, the supply is very high. 100 paintings and 10 buyers.

and painting wants to get sold but buyers don't want to pay a high price

So ultimately, the price went down so a transaction could be done.

It's similar in shares. Any company's shares in stock exchange's timing(9:15-3:30)

Trading occurs which means someone is selling and someone is buying.

Now at a given point in time, the number of sellers is high for some shares

and buyers are very less, there prices will automatically fall.

and at some given point of time, buyers are very high and sellers are

are very less, than the price has to go up.

To understand this, you should know about Bid and Ask.

A bid is the highest price at some given point of time

one is ready to pay to buy a share.

And ask in the lowest price on which one is ready to sell their share.

So a buyer will post a bid and a seller will post an ask.

The difference between them is spread. Usually bid and ask are nearby.

These should be nearby else spread will increase which isn't good for the company.

If you want to check the number of buyers and sellers of a company in real-time.

You can do that in your Demat account. if you are using the Upstox app then

Click on the company's name and then Click on this option to view all details

in realtime that at that time how many buyers are buying at what price

and how many are selling at what price. Now you might be thinking

that share prices also depend on other factors such as bad government policies

or if a company is doing good, their share should increase. This is true but

demand and supply is only responsible for the share prices to go up and down.

I will explain this with an example. Say a company has 5 shares and one

share's price is 100. That share belongs to 5 persons now and bad news is spread

in the market next day about the same company which scared the 4 of them.

The 4 of them decided to sell their shares but they only got one buyer.

So one person sold his 1 share for Rs.100. Now three persons are left.

Now they are worried that their share price may go down and want to sell soon.

In this situation, a buyer appears who bids 90 instead of 100.

He says he is ready to buy for Rs.90. So one more guy sells his share for Rs.90.

Therefore the price of a share is Rs.90 now. Talking about the opposite case now,

assume that very good news comes and we all know that company will perform very well.

Instead of 1 buyer, 50 buyer comes with a higher bid who want to buy those shares.

So sellers will sell their shares at a higher price.

I hope you would have understood these terms properly and

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Till then have a good day!