What is Pricing of a Stock?

by khalid on 04/09/2011 · 0 comments

Most of the people are confused about stock pricing and its price movements. People wonder why some good known companies are trading for a low prices whereas some unknown companies are traded at a high price.

A stock price is determined with investor’s confidence which is based on real performance or perceived performance. Companies disclose their financial status on a quarterly basis and at that time they disclose their cash flow statements, financial statements etc. A companies worth is based on these reports but it also depends on the speculation that override or undermine the prices.

The price of the stocks is affected by rumors also. For example, a nifty (NSE INDEX) stock is looking for an overseas acquisition. This news will have an impact in the stock prices of that stock as people will think that the acquisition will increase the profitability and it will have an impact on the financial statements. Stock markets are very much dependent on the principle of demand and supply. For determining of stock prices the performance and worth of the company is considered.

Daily Stock prices can be obtained in the internet as well as newspapers. They provide information on the current prices as well as market movements. Information provided on the stock quote table can be very useful to the investors to make decision on buying or selling a stock in the market. It requires special skills to read the table and understand each heads. There are short symbols for each stock and there are different heads which give details of current price, 52 weeks high, low, volume etc.

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