Tuesday, 12 June 2018

How Financial Markets Work

A market is a place where buyer and seller meet to buy and sell products/equity on an agreed price. In the scenario with financial markets, firms and individuals enter into contracts to buy or sell a stock, bond, or futures contract. Buyers try to buy at the lowest possible price while sellers seek to sell their equities/commodities at the highest possible prices.
Supply and Demand
Two basic participants are there in a market: the buyer and the seller. In a financial market, the buyer is the investor. An investor is a consumer in a market, one who buys or uses goods and products. The seller is the entity offering the product. Both the buyers and sellers should check stock recommendations daily for daily profits and better returns.

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. The commodity market also works on the same mechanism where an investor invests in metals and other valuable goods with MCX free tips available in the market.

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