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How does the Stock Market work?
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VulcanWM (2758)

The project I'm working on right now is a version of the stock market so today I did some research on how it works.

I get how the stock price increases the more people buy it and decreases the more people sell it, but I don't exactly get how the market makers and the brokers work.

Can someone explain it to me in simple words?

Answered by InvisibleOne (2975) [earned 5 cycles]
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InvisibleOne (2975)

I'm not really an expert, but basically, the stock market works by people buying and selling shares of a company. The value of these shares depends on how much you can sell them for, which is kind of complicated. This probably sounds much better in my head than when you read it, but... The price of stocks isn't set, however, stocks have value because people want them, and that value can rise the more people want those stocks, because people are willing to pay more for them, the value of those stocks rises. The idea of buying stocks it to buy them when nobody really wants them, but you can see that there is value in that company and the value of those stocks will rise in the future, then sell them when they reach their highest value before dropping.
Anyways here something else you can read if you want to learn more: https://www.nerdwallet.com/article/investing/what-is-the-stock-market