What is the stock market, and how is a share price set?
The stock exchange is a market where shares change hands. It’s where buyers and sellers meet. The share price is the price at which someone is buying and someone is selling right now. What someone would be willing to pay is only an offer. The share price goes up and down with people’s expectations, even when nothing about the company changed overnight. It doesn’t tell you what the company is worth.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
How the guinea pigs explain it in Volume 6: Rocky Buys a Share
What is the stock market, and how is a share price set?
The stock exchange is a market where shares change hands. That’s where buyers and sellers meet. The share price is the price at which someone is buying and someone is selling right now. What someone would pay is only an offer. Christian’s line: That’s an offer. Not a price yet. And the share price doesn’t tell you what the company is worth.
Why does a share price go up and down?
Because expectations change, not the company. One card, two buyers: four carrot slices. Four cards, one buyer: one. Christian can rebuild the cards, but not what somebody believes will happen tomorrow. That’s why Mr. Grey asks: Did the company get better overnight? Usually not.
- An offer is not a price yet. You get a price when one person buys and another sells.
- One card, two buyers: four carrot slices. Four cards, one buyer: one.
- The share price isn’t what the company is worth.
Kurs
share price
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. What is the stock exchange?
2. The same card costs four carrot slices in the morning and one in the evening. What changed?
Volume 6: Rocky Buys a Share
What a share is, where a share price comes from and why being a co-owner doesn’t make you the boss. For kids ages 10 and up, bilingual German and English, 92 pages, illustrated in full color throughout.
