Knowledge Basics

What Determines Share Value?

Share prices are determined once a company decides to go public and its IPO (Initial Public Offering) is released. The company works with investment bankers who use intricate valuation techniques to evaluate how many shares can be offered and at what price.

After that initial offering, the shares are traded on the secondary markets such as the New York Stock Exchange (NYSE) or the Nasdaq. Here the value of the stocks depends on the supply and demand. Low supply and high demand raise the price of a share, while high supply and low demand lower it.

Dividend announcements can also influence the share price. If dividends are higher than expected, then share prices tend to increase and vice versa.

Economic booms, recessions, political environment, and market sentiments are several other factors that affect the value of shares.

What are Shares CFDs?

Sometimes shares are traded as CFDs (Contract for Difference). This means you don’t take ownership of the shares, but simply trade the price movements.

CFD trading enables you to speculate on price movements in either direction. So, while you can make a profit if a market rises, you can also open a CFD position that will profit as the market decreases in price. This is referred to as selling or ‘going short’ as opposed to buying or ‘going long’.

For example: If you think Google shares are going to fall in price, you can go short and sell a share CFD on the company.

wwwstartraddev

Recent Posts

Daily Technical Update: Nasdaq Breaks Above 19,000 After 3 Days of Consecutive Gains

U.S. Stocks rise for the third consecutive day Nasdaq broke two crucial resistance levels in…

20 hours ago

Daily Fundamental Update: Stocks Rebound on Reports of China-US Trade Talks

U.S. President Trump claimed ongoing trade talks with China, contradicting Chinese officials' denials. China's Ministry…

20 hours ago

Important Notice: Historical Data Compression for Cent Accounts on Live 1, Live 2 and Live 4 Server

Dear Valued Client, To enhance your trading experience, we will be performing a historical data…

22 hours ago

Important Notice: New Forex Product Launch

Dear Valued Client, We are pleased to announce that STARTRADER has officially launched a new…

2 days ago

New Rules for Pending and Stop Orders

Dear Valued Client, We are pleased to inform you that STARTRADER has updated the order…

3 days ago

Daily Technical Update: Gold Breaks a New Record Above $3,400

Gold prices continue to break new highs as fear in the markets grow and demand…

4 days ago

This website uses cookies.