Stock Market Price, like any other market price, is the price at which a particular product is traded in its respective market. It is influenced by the same factors like demand and supply that influence the market price of commodities that are sold in markets other than the stock market.
It is generally understood that the most price movements in the stock markets result from speculation, which is a way of trying to anticipate the price of a particular stock at some point in the near future. When a large number of operators in the market speculate on a particular stock the immediate outcome is a rise in the demand for that particular stock. This results in the said stock becoming scarce in the market pushing up its price.
Stock Market Price can be studied from different perspectives, for instance.
Opening price
This is the price at which trade in the stock commences every day but the price doesn’t remain the same throughout the day and is liable to rise or fall depending on the demand and availability of the stock in question.
Closing price
This is the price at which the day’s trading is ended. It is also the opening price of the next trading day. The closing price of a stock indicates the stability of a particular stock, as it would be considered unstable if the difference between the opening and closing prices is too much within a specific period.
Closing prices are the basis of stock market indices as market analysts mainly study the movement of closing prices over a specific period to determine the quality or strength of stocks. When the price of any particular stock shows wide disparity in its opening and closing prices over a fairly long period it would be classified as an unstable or volatile stock. On the other hand when a the price of a particular stock displays very little disparity between its opening and closing prices and also shows steady rise over long periods it is considered as a safe stock and is rated highly by the analysts. Such stocks are always in demand and normally command high prices.
Listing Price
After a company successfully completes its IPO (Initial Public Offer) it is allowed to trade in the stock market(s) it has applied for. However the market regulator in consultation with the respective stock market decides at what price the stock could commence trading in the stock market. This price is eventually decided after carefully monitoring its movement over a period of time soon after the IPO is over.