Before we get started with the specifics, it’s important to point out that when you trade stocks in a conventional sense, you’re buying into a company, in very small amounts. The more stocks you own, the greater your share in the company. Publicly traded stocks number in the thousands, and many stocks are being listed or delisted each and every day.
The value of a stock is dependent on a wide variety of factors, including the fundamentals of the company, socio-economic issues, geopolitical issues, inflation, unemployment, taxation, and a host of others. At any given time all of these factors are working together – often in opposite directions – to influence the price of the company’s stock. But perhaps the biggest drivers of stock prices are speculation and perception. The more people that believe a stock is likely to move up or down, the greater the likelihood that they will move the stock price in a particular direction.
Stock prices are only calculated when a company decided to go public and makes its initial public offering. The company will primarily pay an investment bank that makes use of complex valuation techniques that determine the results of how many shares will be offered and at what exact price.
As a company’s total value is its Market Capitalization that is represented by its Stock Price once the company goes public this is published on the . Market capital is equal to the stock price, but multiplied by the actual number of shares. E.g.: If a company’s value is estimated at $100 million it may issue 10 million shares at $10 per share.
Once the IPO is over and a stock is trading on the stock exchange its price will change each day as a function of the supply of stock and the demand from investors. Shares that have a high demand see their price go higher, but if investors don’t see a bright future for a company the stock will see light demand and the price could decrease as a result.
At its most basic a stock price is determined by supply and demand. This is true in any market dynamic where buyers and sellers determine the market price of an asset through their negotiations. When buyers are optimistic and demand is high they will be willing to pay more and prices will rise. But when they aren’t very enthusiastic demand falls, and since investors aren’t willing to pay as much the price falls too.
Analysts will also use quantitative techniques to predict the future price of a stock. These models use the theory of the time value of money (TVM) and are based on the concept that the current price of a stock is equal to the sum total of its earnings and dividend payments discounted to present value. This is not an absolute computation however, which is why analyst price targets for a stock can vary so greatly.
|Instrument||Spreads (as low as)||Leverage (up to)||Trading Hours (GMT)|
|***CHF/PLN||40(pips)||1:200||21:15 - 20:57|
|EUR/CZK||3.5(pips)||1:100||07:17 - 14:14|
|EUR/HUF||72(pips)||1:200||21:17 - 20:57|
|****EUR/NOK||40(pips)||1:200||21:15 - 20:57|
|***EUR/PLN||35(pips)||1:200||21:15 - 20:57|
|****EUR/SEK||50(pips)||1:200||21:15 - 20:57|
|**EUR/TRY||30(pips)||1:100||21:05 - 20:55|
|EUR/RON||250(pips)||1:200||07:20 - 11:55|
|EUR/RUB||100(pips)||1:25||07:05 - 16:00|
|GBP/RON||250(pips)||1:200||07:20 - 11:55|
|USD/CZK||3(pips)||1:100||07:17 - 14:14|
|USD/HUF||75(pips)||1:200||21:17 - 20:57|
|****USD/NOK||50(pips)||1:200||21:15 - 21:57|
|***USD/PLN||30(pips)||1:200||21:15 - 20:57|
|****USD/SEK||50(pips)||1:200||21:15 - 20:57|
|USD/RUB||75(pips)||1:25||07:05 - 16:00|
|USD/RON||200(pips)||1:200||07:20 - 11:55|
|USD/BRL||60(pips)||1:50||13:05 - 19:54|
|USD/INR||100(pips)||1:50||03:45 - 09:59|