Tuesday, 12 June 2018

How Financial Markets Work

Markets are the meeting place where buyers and sellers come together and determine prices. A financial market is a place where firms and individuals enter into contracts to buy or sell a specific product such as a stock, bond, or futures contract. Buyers seek to buy at the lowest possible price and sellers seek to sell at the highest possible price.
Supply and Demand
All markets comprise two basic participants: the buyer and the seller. In a financial market, the buyer is the investor. A buyer or investor may also be referred to as a consumer — one who buys or uses products or resources. The seller is the entity offering the product. Both the buyers and sellers check stock recommendations daily for better returns in their trade.

Prices for goods or services in any market depend largely on the supply and demand of the product or service. Demand is the number of goods that consumers purchase in a given time period. The law of demand suggests that the demand for a product and the cost of that product have an inverse relationship: as prices increase, demand for that product decreases. Supply is the number of products or services that a producer is able to make available to consumers at a given time. The law of supply suggests that as a product’s price increases, the quantity supplied to buyers also tends to rise. Same principle is in commodities where you invest in goods and other valuable materials with MCX free tips available in the market. 

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