This kind of disparity may make us wonder how the stocks are priced and what affects the price movement. Why do we find a wide variety of prices?



The prices of stocks are determined by a large number of factors. The most important of these factors is the performance of the company itself. The quarterly financial reports of the company where in they reveal their cash flow, orders, sales, earnings, future expansion programs and strategies and so on form the foundation of the company's real value.

While an enlightened investor may be able to understand and analyze these reports, an ordinary investor prefers to go by what he casually reads in the print media, watches on the TV channels and hears from his ?informed friends and sources?. Most part of this information may consist of rumors and sensation mongering.

The problem with ordinary investor is that he is easily swayed by this type of hyped information and his confidence in the company's performance is based more upon the picture that is perceived and projected by such sources. This perceived picture rather than a conscious and educated personal study of the company's performance influences the price of the stock. It is therefore clear that the investor speculation can undermine or overestimate the actual financial data.

The volatile and mercurial nature of the stock market is bound to generate rumors. Sometimes these rumors are spread by the vested interests as well. So when there is a news that a company is about to make some strategic policy move that will radically influence its performance, the buyers flock to buy the stock of that company.

The principal of supply and demand starts working inexorably resulting either in steep fall or rise in the price of the stock. If there is a sudden upsurge in the demand, the prices rise and as against this, if the investors become apprehensive, the price tumbles down. All this happens irrespective of the factual performance data of the company.

It must, however, be borne in mind that the effect of the rumors does not last for a long time. Those traders who are carried away by the false information generally suffer losses as it is the company's true performance that determines its price in the long run.

This, however, is not to suggest that all the information published in the media is false. As an intelligent investor, you should be able to separate the corn from the chaff.

Stock market prices are available from numerous reliable sources. You can get the stock prices from the financial sections of the newspapers and magazines. If you want to get the latest up to the moment data, your best source is the website of your stock broker or the stock exchange itself.

Online stock market sources provide current stock prices around the clock. Full service brokers also provide you the latest prices on your cell phones.

You can read the detailed information about the financial performance of the company from the website of your broker. Most brokerage sites publish the detailed reports of the stock market with their objective and enlightened comments. There are the latest newsflashes about the board meetings and the latest company decisions. The market trends are explained with the help of charts and diagrams.

News about the current national and international events, government policies and so on that may affect the price of your stock are flashed quite continuously.

A typical stock market quote table may consist of the ticker symbol of the company, the price of its stock, % change in price, time, high, low, volume and so on. The price tables are updated almost every minute on the internet.

The price table shows the difference between the previous day's closing price and the current price quote. The time column shows the time of the last transaction. High denotes the highest price at which the stock was sold, while the low denotes its lowest price. Volume indicates the number of shares that have been traded. Some table reveal the 52-week highest and the lowest prices.