So How Does The Stock Market work?
The Stock Market is quiet like an auction for a house or antique painting. When you buy an object at auction, you aren't buying from the auctioneer. It's the auctioneer's job to match buyers with sellers, and to get the best price possible for the seller.
Obviously there is no fixed price for the item at the auction and the selling price of the item is determined by how much people are willing to pay or bid for that item. This is the same principle that the stock market works on but obviously rather than a painting, car or house the item in question is shares in a particular company.. It's an auction-based market, with brokers who have the task of matching the buyers and the sellers of stocks.
So why would a company go public and list on the stock market. It's simple. Almost always the sole reason for any company going public and listing on a stock exchange is to raise funds for the company to continue to move forward in their venture. they do this by offering the public shares in their company at a pre determined price which is called the float price. These investors are rewarded as trhe company moves forward and makes higher profits as their shares increase in value.
So what is the Stock Market?
Put simply the stock market is a place where investors,traders and owners of stocks come to buy and sell their holdings. If you think of it the ame way and a fruit and vegetable market it makes it a little bit easier to understand.
Obviously it is a lot more complicated than that but in essence that is it.
The buyer or seller of the stock goes to the market( often goes online) to see the price of a particular stock they are interested in and then uses a licensed stock market broker to buy or sell the stock on their behalf. This way the market is run ethically and honestly and the broker is held responsible for the transfer of your shares.