The document explains how the stock market operates, likening it to an auction where buyers and sellers influence stock prices based on their expectations. It describes the roles of market makers and highlights the importance of stock market indexes such as the Dow Jones and S&P 500. Additionally, it emphasizes the increasing accessibility of stock trading through online platforms, enabling more individuals to invest and create wealth.

1. How Stock Market
Works

2. Summary :- How Stock Market Works
provides information to those wanting to earn
cash flow, passive income and create wealth
for lifestyle using stock market strategies and
real estate.

3. Description :- How the stock market works
is a mystery that confuses many people and
unfortunately prevents them from investing in
the stock market. However many of us who
have money in any type of retirement or
managed fund account can count ourselves as
a participant in the stock market anyway. Have
you ever stopped to wonder how the stock
market works?

4. If you have ever attended an auction then
you might be able to relate to the daily
operation of the stock market. The stock
market is basically an auction between those
who believe that the stock is overpriced and
will drop (known as the bears) and those
who think the stock will go up and is
underpriced (known as the bulls)

5. At an auction, there is an auctioneer, the New
York Stock Exchange (the largest stock market
in the world where 85% of the world's finance
is exchanged), and the American Stock
Exchange is called the market maker. The
market maker tries to match buyers with
sellers so it is acting as the auctioneer.

6. There is no set stock price, so Institutions
and traders can bid for and offer to sell stock
at different prices and a balance between
these determines the final stock price as set
by the market maker. Stock Market prices
fluctuate throughout the day depending on
supply and demand.

7. Bidders buy on the expectation that the stock
price will go higher and sellers sell because
they think the stock price will go lower. The
stock market is a game of psychology
between the bulls and bears that repeats
itself daily.

8. There are many stock market indexes that
comprise groups of stocks within a certain
group or industry. These indexes rise and fall
depending on the stock prices of the
companies included in these indexes. The
most famous stock market index is the Dow
Jones which comprises the top 30 stocks in
the USA, there is also the S&P 500 that is
made up of 500 so called "blue chip" stocks.

9. The NAZDAQ operates completely differently
from the New York and American Stock
exchanges. The NAZDAQ operates
completely electronically. The trades placed
on the NAZDAQ are placed through a huge
computerized network. Buyers and sellers
place their bids and offer stocks through the
network.

10. The stocks in the system are put into
different levels depending on their bid or
ask price. The highest bid price gets the
top position for the purchasers and the
lowest sell price is the first to be sold for
the sellers. This is basically a
description of how the stock market bid
and ask system works when you see
different prices listed for a particular
stock.

11. To most stock market investors all this goes
on behind the scenes. The internet has
simplified access and the understanding
required into how the stock market works in
order to invest successfully. The number of
investors investing in the stock market online
has increased dramatically over the last
decade as people can easily get an online
stock trading course for beginners and have
a basic understanding of how the stock
market works.

12. This has allowed investors to not be reliant
on stock brokers charging high brokerage
commissions in exchange for their stock
market knowledge.
Small, educated, astute investors with a
good understanding of how the stock market
works through a good online stock trading
course can now invest with confidence in a
level playing field and create substantial
profits to grow their net wealth.

13. Author :- Dhanashri Academy
provide information to those wanting to
escape the rat race and earn passive income
and create wealth for lifestyle. It contains
information on How the Stock Market works
and different Stock Market Strategies to
generate cash flow from the stock market.