STOCK EXCHANGE EXPLAINED IN 2 MINUTES


What is the stock exchange & how does it work? The stock exchange is a global marketplace. When companies decide to go public they divide
the company into shares which are floated on the stock exchange, i.e made available
on the stock exchange to buy and sell. People who purchase shares of the company
become shareholders and own part of the company. Shareholders, unless they own a significant
percentage of the company’s shares are unlikely to have any direct say on how the company
is run but they will be able to attend shareholder meetings where the bosses of the company will
present their strategies and plans for the company going forward. These meetings are
also a place where the bosses are answerable to the shareholders for bad decisions and
poor company performance. Depending on the perceived value of a company
the price of a share will rise or fall. If say Company X has landed a lucrative government
contract then confidence in Company X will rise and the company’s share price is likely
to rise. On the other hand if Company Y suffers a set
back during the manufacturing of it’s product confidence in Company Y is likely to fall
and the company’s share price will also fall. The value of shares fluctuate daily and stock
brokers work the market for their client’s, trying to make a profit for them by buying
shares when the prices are low and selling shares when the prices are high. In relation to the stock market you may have
heard acronyms and terms used such as FTSE, NASDAQ, DOW JONES, S & P 500 etc. These are the names of share indexes and they
measure the value of a section of the stock market. For example, in the UK the FTSE 100
is a share index composed of the 100 largest companies listed on the London Stock Exchange.
These companies are often dubbed blue chip companies and include companies such as Barclays,
Easyjet, Tesco and ITV. The value of this share index is an indicator of how well the
UK’s economy is doing as a whole. So! that’s the stock exchange in a nutshell,
it’s a global marketplace where shares and other company securities such as bonds are
bought and sold. This is obviously a simplified explanation
but it should give you a basic understanding of what the stock exchange is and how it works. We hope you enjoyed this video and remember
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24 Replies to “STOCK EXCHANGE EXPLAINED IN 2 MINUTES”

  1. What determines how many shares a company is split up into?
    What are dividends and what determines the value of them?

  2. Hi, I'm confused about the graph at 1:10 . Is that not showing an increase in the share value as the confidence falls?

  3. Your version of the stock market is false — in today's stock market we have central banks who buy bonds and stocks with money printed from nothing — in this way they created the illusion that these stocks and bonds are worth money than they actually are. In other words it is COMPLETELY FAKE. The market is completely manipulated by central banks who create money out of thin air. The emperor has no clothes.

  4. If prices are high..ppl who did bought they will sell….but who will buy at high pricesPlz answer for this qstn

  5. Thank you so much for these videos but it would be great if you could maximize the interruptions as I think a lot of people have come here to learn and the jokes can be very distracting. The video could have been a lot longer with the additional talking – I hope you guys aren't offended by this as this is constructive criticism and not meant to be insulting in any way 🙂

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