The Stock Market for College Entrepreneurs
You’ve probably seen this scene on television dozens of times: large monitors high up the ceiling of a large room where there are so many computer terminals and people in business suits talking or shouting to each other.
And you ought to know what that scene is. It’s the stock exchange - the typical visual used whenever the news is on economy and business-related stuff.
But do you know what the stock exchange really is about? If you don’t, that’s okay. Not so long ago, all I knew about the stock exchange was people gaping at the changing numbers and codes on display screens as if they’re watching movie trailers.
So what is the stock market? It is the market where securities are sold and bought at agreed prices. Securities are company stocks, bonds, options, and futures that are listed and traded on a stock exchange.
Stock exchanges are entities that enable buyers and sellers to meet either through a physical venue, or a virtual or electronic one. Some examples are the New York Stock Exchange, the NASDAQ, and the Paris Bourse.
In stock exchanges with physical locations, transactions are done on a trading floor where buyers and sellers engage in verbal bidding and negotiation known as the open outcry method. In the virtual stock exchange, buyers and sellers enter their bids and offers through telephone or computer network. Buyers and sellers of stocks ask for prices that they want. Prices are negotiated until buyers and sellers agree and sales of stocks take place.
You may have heard of stock brokers and wonder what they do. Basically, they are the ones who trade on behalf of their clients in exchange of commissions for closing deals. They’re somehow different from stock dealers who buy and sell financial assets on their own. They earn by selling assets at a price higher than what they originally paid for it.
Stockholders, or those who have stocks, earn in this way. However, it also happens that the company in which the stockholder owns stocks fails to give them dividends or returns probably because of bad business deals. At this situation, the stockholder can opt to sell his shares albeit at lower prices – a case of asset turning into liability.
Following market principles, prices of stocks and other financial assets are determined by the supply and demand. The lesser the number of shares, the higher its prices would be. But besides the number of stocks, demand is also determined by the expected profitability of the company stocks being sold.
Related Articles:
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- Getting Started in the Stock Market - Investing 101
- Why it is Easier to be a Student Entrepreneur
- Are Entrepreneurs Born, Bred or Both?
- What every college site owner should know about market research
…pretty obvious post, unless if you were giving some recommendations.