How are share prices worked out?

ag359

Just a quick question...

How exactly are share prices worked out? Yes, I understand some of the things that affect the share price, but who actually decides on the figures that are printed in the paper in the morning, and quoted on the internet during the day?

grumbler

ag359 wrote:

... who actually decides on the figures that are printed in the paper in the morning, and quoted on the internet during the day?

Market = Stock Exchange = Buyers+Sellers

P.S. How a Stock Market Works - Qucik Guide for Beginning Investors

ag359

grumbler wrote:

Market = Stock Exchange = Buyers+Sellers

P.S. How a Stock Market Works - Qucik Guide for Beginning Investors

Thanks. I realise that the market price is determined by supply and demand, which is basically what that article says. But that means that shares are changing hands are different prices all the time, so who decides which prices end up in the paper?

monkeydust_2

The price "in the paper" is a snapshot price, typically its taken when the market closes for the day.

grumbler

ag359 wrote:

... But that means that shares are changing hands are different prices all the time, so who decides which prices end up in the paper?

In fact most of traiding is being done through some complex electronic system and all this is about the same as for currency exchange rates: http://www.oanda.com/site/help/cc_undr.shtml

Currency price: bid and ask

Players in the foreign exchange market, such as banks and corporations, buy and sell currencies openly. Currency prices are expressed in terms of "bid" and "ask." Bid is the price at which buyers offer to buy currencies from sellers. Ask is the price at which sellers offer currencies to buyers. Ask prices are usually slightly higher than bid prices, reflecting the profit margins of sellers.

How we calculate the exchange rate

To provide you with an accurate exchange rate, we take an average of all filtered bid/ask currency prices (which we collect from live data suppliers) over a period of time. This average is the "median price" (see Example conversion results). We take the average of the bid and the ask of the median price to compute the current exchange rate.