Theory and Instruments of Stock Markets
The combination of buyers and sellers of stock or share, which represents the ownership of the business, is known as the stock market or share market. Four types of stocks are traded in the market viz. growth stocks, yield stocks, new issues, and defensive stocks. Before going into stocks, let us understand some of the theories or ideologies that are applied while trading in the share market. Info on stocks – An insight into fair value The theory was popularized by J Peter Steidlmayer in 1980, in which he explained why the market moves the way it does. Based on the past information on the stock and price available, you can interpret whether the current price of the share makes sense. The theory is not only applicable to shares but also other commodities, consumer goods, houses, or in our case, securities. The Auction Market Theory takes accounts following three elements price, time, and volume, which will gradually gravitate towards the fair value of the partic...