InvestorQ : I find stock prices constantly moving in a volatile manner. Who determines the price of shares?
Priyanka Jain made post

I find stock prices constantly moving in a volatile manner. Who determines the price of shares?

Answer
user profile image
Swati Naik answered.
1 year ago


Stock prices are basically determined by the forces of demand and supply. There is no one person or organization that controls the price. The market determines the price of the share and the market factors a number of aspects like past performance, future expectations, order flows, management changes etc. Normally, share prices go up when the company is growing very fast or it is earning very good profits or it gets new orders. As demand for the stock picks up more investors want to buy the stock at higher prices and that is how the price goes up. Price of share is determined by demand and supply and to that extent it is like any other commodity. The only difference you need to understand about stock pricing is that there is an underlying business behind every stock and you need to understand that business before taking a view on the stock.