How is a Stock Price Calculated?
Stock Prices Stock prices are not calculated in the way that a mathematical formula is calculated. Instead, stock prices are driven by the same factors that drive supply and demand generally, and indeed, pricing of stocks is similar to pricing of other goods. In the stock market, potential buyers of a certain type of stock meet up with potential sellers of a certain type of stock. The bidding process occurs, and however the two parties settle the bidding is the price of the stock that is reported, for example, by stock tickers. There’s nothing mysterious here, just classic supply and demand. Supply and Demand Stock, or partial ownership in the company, is traded every day on the stock market. There are many investments for investors to choose from, and they make their decision based on the expected return for the investment and the risk associated with that investment. No investments are without risk, and those that are more risky tend to have the potential to achieve higher returns. T
