How The Stock Exchange Works (For Dummies)

How The Stock Exchange Works (For Dummies)


What is the Stock Exchange
and how does it work? The Stock Exchange is nothing more
than a giant globally network tend to organize the market place where every day
huge sums of money are moved back and forth. In total over sixty trillion (60,000,000,000,000)
Euros a year are traded. More than the value of all goods and services
of the entire world economy. However it’s not apples or second hand
toothbrushes that are traded on this marketplace. But predominantly securities. Securities are rights to assets,
mostly in the form of shares. A share stands for
a share in a company. But why are shares traded at all? Well, first and foremost the value of a share
relates to the company behind it. If you think the value of
a company in terms of a pizza. The bigger the overal size of the pizza,
the bigger every piece is. If for example Facebook is able to greatly
increase its profits with a new buisness model. The size of the companies pizza will also increase,
and as a result so will the value of its shares. This is of course great for the share holders. A share which perhaps used to be worth 38 euros
could now be worth a whole 50 euros. When it’s sold this represents
a profit of twelve euro per share! But what does Facebook gain from this? The company can raise funds by selling
the shares and invest or expand it’s buisness. Facebook, for example, has earned sixteen billion
dollars from it’s listing on the Stock Exchange. The trading of shares though,
is frequently a game of chance. No one can say which company
will preform well and which will not. If a company has a good reputation,
investors will back it. A company with a poor reputation or poor
performance will have difficulty selling its shares. Unlike a normal market in which goods
can be touched and taken home on the Stock Exchange only
virtual goods are available. They apear in the form of share prices
and tables on monitors. Such shareprices can rise
or fall within seconds. Shareholders therefore have to act quickly
in order not to miss an opportunity. Even a simple rumor can result in the demand for
a share falling fast regardless of the real value of the company. Of course the opposite is also possible. If a particularly large number
of people buy weak shares. Because if they see for example
great potential behind an idea. Their value will rise as a result. In particular young companies
can benefit from this. Even though their sales might be falling,
they can generate cash by placing their shares. In the best case scenario this will result in
their idea being turned into reality. In the worst case scenario, this will result in a
speculative bubble with nothing more than hot air. And as the case with bubbles,
at some point, they will burst. The value of Germany’s biggest thirty companies
is summarized in what is known as the DAX share index. The DAX shows how well or poorly
these major companies and there by the economy as a whole
are performing at the present time. Stock Exchange is in other countries
also have there own indices. And all of these markets together
create a globally networked marketplace. Subtitles by the Amara.org community

Only registered users can comment.

  1. REEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE

  2. What I don't get is …

    So you buy a stock at $38, right? Then you wait a little bit and sell it at $50.

    But what stupid person would buy that stock from you at $50? No normal buyer would wait til a stock is MORE EXPENSIVE than it was before to buy it. doesnt make sense. How could you guarantee that you will always find a buyer. Bunch of retarded buyers out there, I guess lol

  3. I just got started with this Stock investing if a thing, i'd like to know the best stocks i can invest in, please i need professional help.

  4. So how does the stock market crash? I mean like since it is influenced by companies from all over the world how can all of them crash simultaneously?

  5. Stock Market brings together people who want to buy and sell the shares of companies. Its as simple as that.

  6. IQD Momentum strategy is built with social at the forefront for stock exchange mostly. Fully integrated chat systems, chat forums and an excellent way to share your drawings and analysis with a single click to any group or forum.
    This makes for an excellent way to generate ideas or learn beside other traders with Lukasz Wilhelm. You have to try it and see it in action to understand the power of the implementation.

  7. The book to read on this topic for begginers is The Fundamentals of the Stock Market
    By B. O'Neill Wyss

  8. In the future it might help to mention dividends, buybacks, index funds, and mutual funds, perhaps in a follow up video.

  9. I understand but business & stock marketing and international corruptions of Belgium authority are not combination , Authority of Belgium using my emails and social Network for things are not religious or politics means what ? you mast learn how to fight those peoples are against peace and security it doesn't Matter where report come from even ethnique menolities to grows Worldwide business and stock marketing , I don't do anythings at all with Belgium why if you see suspicion you don't ask them since I was in united kingdom I was in contacts with us Sony Music and others organisation you never had this , Thank you to take action , alias BrownLonardo

  10. This is a nonsense invented by bored capitalists who didn't know what to do with the virtual goods they used to demand better life for themselves. The only true way would be abolishing companies and creating Communist Anarchy.

  11. Single vid ,is it enough?no?complete it?if u leave it means ytube is waste of info,ur material acquiring is also a fake..??one vid may not be convincing by,for the viewers?

  12. Why company need share holder . I don't understand, let me consider that ,if you start Small business for your own money than you attained a break even point than you earn more money and than you go to further updates to your company, these process continue no need for share holder !!!!

  13. Very educating but didnt start making profit in trading by watching videos …thanks to the help of burmah experts now I know what winning feels like

  14. The market has been of immense success . I just starting making up to 155% and above in profit from my stock investments with my expert analyst and assets manager Mr Hurley Jordan

  15. Self trading is bad especially for inexperienced noobs, (complexities & risks). Pro tip, get an professional account manager/financial planner (Lucas Anders) and trade under his portfolio. That way your profit is ensured while you learn the ropes

  16. I have dyscalculia so I'm not good with numbers and stuff so not sure if I would understand if I'd be doing it right anyone else have same problem Haha

  17. Trading in Stocks on the 5paisa app is amazing, use referral code 50709793 to open a free and completely paperless demat account, brokerage is 10 rupees flat on any order you trade..in any segment 😔😔💖🌷i did it

  18. This is glorious, I have been researching "historical stock market index values" for a while now, and I think this has helped. You ever tried – Fenason Zeyames Idea – (just google it ) ? Ive heard some extraordinary things about it and my neighbour got amazing success with it.

  19. All thanks to Mr Allen Brookes for ensuring the best investment for me in the stock market,experts like that are very hard to come bye…you could still contact him through his mail<<[email protected] com<<

  20. I’ve watched like 200 videos on stocks and have yet to find one that explains who do you sell your stocks to…

  21. What type of software do you use to create these type of graphics? How much is it and is it easy to use? Could anyone make videos similar to this easily? Cheers

  22. A huge pile of people receive money without producing any goods, or ulcers, nothing at all. Useless parasites.

  23. Schade dass das Video nicht auf Deutsch ist das hätte ich auch mal eins und zwei Arbeitskollegen unter der Nase gehalten

  24. Lately, YouTube has been translating the title of some videos, and in my mother tongue the title of this one says: how the stock market works(for dummies)

Leave a Reply

Your email address will not be published. Required fields are marked *