Investing in big companies in your area by buying shares of them is one of the most authentic way to earn money. Interest of people is increasing in doing this business, but a large number of people don’t even know about basic terms used in this business of stocks and shares. Some of the most common terms used in stock market are stock price, shares, index and market cap ( will discuss further terms in coming days ). Below we have defined all these four common used terms in stock market, So you can get a basic idea about them.
1. Market Cap
Market Cap or Market capitalization is like the total value of the shares of a company. It is calculated by multiplying total number of shares with stock price per share for that company.
Related: What is market cap and how companies increase their market cap
Share is a unit of ownership which represents the equal portion of that companies capital. Companies sell a part of them as shares to bring investment in their business to keep growing.
Related: Things to think about before buying shares of any company
3. Stock Price
Stock Price is the price per share for a company. Stock price for the shares of a company is allocated to it according to its performance. Mainly yearly income sheets or reports effect stock price a lot.
4. Stock Market Index
Stock Market Index is method of measuring the value of any section of stock markets. Stocks markets both national and international all over the world use same method to measure the value of any section of stock market.
Know best about most used terms in stock market:
This is the list of some most used terms in the stock market, these are market cap, stock price, shares and market index. All these four terms are widely used by the investors in the stock markets all over the world. If you are going to invest in any business then understand these terms before doing that. In coming days we will briefly discuss these terms. We hope you will like the stuff but stay in touch with us because there is coming more.