Tag: stock

Factors That Cause In Stock Price Volatility

Factors That Cause In Stock Price Volatility Can stock prices of companies known changes as a result of the announcement of the results are not expected from the market, so that it is heading shares of companies that announce better-than-expected to rise results of prices, so that in many cases some of the companies shares prices rise despite announcing realize losses just the loss ratio was better than expected.

Stock markets are currently considered an essential part of the economies of the countries of different 100K Factory Revolution on the ladder of progress, as they are the main source of funding for economic growth. Which it is to resort companies to the stock exchanges and stock markets for liquidity and funding needed to expand and continue their economic activities. The newly become these markets know another activity is shares of companies trading in order to take advantage of fluctuations defined by the shares listed in the stock market prices of companies, not just have a stake in the companies for a share of the operating profit, but rather to buy and sell in order to take advantage of price differences in the short and medium term.

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Supply and demand
With the development of stock markets over the past century as a result of the technological revolution and the development of means of communication, financial exchanges has become a center for the exchange of shares between the participants in the financial markets from investors and speculators and Toutin, in the same way in which the exchange of goods between the ordinary people. So stock prices in the financial markets are subject to the laws of supply and demand along the lines of goods traded in the normal life and services. Hence, in the case of increased demand for the purchase of the shares and became a demand greater than supply, the price of this stock is moving higher, and on the contrary, if the demand dropped to share what has become a supply greater than the demand, the price will go down.
Financial Results
Financial results of the company is the main criterion that cares about a lot of traders and investors, especially long-term investors from individuals or financial institutions. Investors are studying the ability of companies to make profits through the analysis of several financial indicators and figures like the number of transactions, market share, return on capital, the expected growth rates in the next five years, the ratio of net profit. Investors will generally look to buy shares of companies that can achieve the best results on an ongoing basis to ensure a share of the United Trading Network profits, which results in an imbalance between supply and demand for shares of companies that do well in the eyes of investors, so investors are going to buy quantities of superiority the quantities offered by the owners of such shares for sale that leads him higher prices, in contrast to when investors sell stock they own in companies no longer achieve the desired financial results resulting in a rise in the amount of supply versus demand and thus lower the prices of these stocks.
Market expectations
Can know the stock prices of the companies changes as a result of the announcement of the results are not expected from the market, so that it is moving stock prices of these companies announcing better-than-expected to rise results, so that in many cases some of the companies shares prices rise despite announcing Losses just because the loss ratio was better than expected. The same logic applies to companies that announce the results are worse than expected despite the fact that these results will be positive. For example, if the firm’s announcement of a profit, but the profit was below expectations, it is very likely that stock prices will fall for this private company Short term. It could also go up or stock prices will fall before the announcement of the results so that investors engage in transactions on the shares of these companies, in an attempt to pre-empt the market and get the stock the best price to take advantage of the fluctuations that may occur in share prices after the announcement of the Stock results.