SHARETIPSINFO >> Articles Directory >> A Common Misconception About Stock Prices


You have heard people investing in the stock markets, right? But you do not have any idea about how stock market works. There is a common misconception about stock prices in the stock market. There are people who take it very easily when it comes to making money in the stock market. But in reality it is not so. Unless you come to know about how does Indian stock market functions, you will not be able to make a good position in the stock market. So, let us have a look at what exactly is a stock market.

About Stock Market

When we say stock market, people think it to be something very risky in which one risks all his or her money in the market. But a stock market is basically a platform for trading shares in publicly listed companies (PLCs). Here you can invest money with the hope of getting good returns. However there is a risk associated with this type of market. But if you are able to know when and where to invest your stocks, your risks get minimized to a lot extent. So you need to have a good knowledge about the stocks that you are going to invest. It your hard earned cash and you should be extra careful and always hope of getting very good high returns in the stock market.

There are people who want to control time as well as money at the same time. So they wish that their money becomes double after they invest in a stock market. So they invest with the hope of increasing their profits. This is the main reason why you can see people investing in the stock market. Then there is a concept called day trading where investors trade for short term investments. But there are many investors who do not prefer to go for this type of trading as they think this to be very risky. But this is not the case. If you know how and where to invest your money, then you can surely get good benefit. So do think before you invest in the stock market. If you do not have any idea about the stock market then it is advisable to read books and also make research on the market so that you can get to know the present situation of the market.

A stock market can be a private or a public one. Stock market is something that you can never predict what is going to happen in the market tomorrow. So, do try to get some idea how stock market functions. You should also be able to get information on the different concepts of the stock market like NSE, BSE, NASDAQ…etc.


How Stock Market Works?

It is very important that you know how a stock market works. Suppose you wish to buy a stock, then the investor is presented with two prices like 17-18. The first price (17) is always lower and is known as the bid or the sell price. Now coming to the second price, the second price (18) is always higher and is known as the offer or the buy price. So you can quite well see the difference, right?  Well, this difference between the bid and the offer is called ‘spread.’ So make sure you get all the right information about the stock market and do try to make some understanding of all the concepts of the stock market so that you do not remain ignorant about its functions in the economy. It is your own money and you should be very careful when it comes to investing your hard earned money in the stock market. So get a good understanding of the market situation.

Whenever you make up your mind to invest in the stock market, do not forget to go for a stock market consultancy so as to avoid a common misconception about stock prices in the stock market.



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