How The Stock Exchange Works (For Dummies)

What is the Stock Exchange
and how does it work? The Stock Exchange is nothing more
than a giant globally network tend to organize the market place where every day
huge sums of money are moved back and forth. In total over sixty trillion (60,000,000,000,000)
Euros a year are traded. More than the value of all goods and services
of the entire world economy. However it’s not apples or second hand
toothbrushes that are traded on this marketplace. But predominantly securities. Securities are rights to assets,
mostly in the form of shares. A share stands for
a share in a company. But why are shares traded at all? Well, first and foremost the value of a share
relates to the company behind it. If you think the value of
a company in terms of a pizza. The bigger the overal size of the pizza,
the bigger every piece is. If for example Facebook is able to greatly
increase its profits with a new buisness model. The size of the companies pizza will also increase,
and as a result so will the value of its shares. This is of course great for the share holders. A share which perhaps used to be worth 38 euros
could now be worth a whole 50 euros. When it’s sold this represents
a profit of twelve euro per share! But what does Facebook gain from this? The company can raise funds by selling
the shares and invest or expand it’s buisness. Facebook, for example, has earned sixteen billion
dollars from it’s listing on the Stock Exchange. The trading of shares though,
is frequently a game of chance. No one can say which company
will preform well and which will not. If a company has a good reputation,
investors will back it. A company with a poor reputation or poor
performance will have difficulty selling its shares. Unlike a normal market in which goods
can be touched and taken home on the Stock Exchange only
virtual goods are available. They apear in the form of share prices
and tables on monitors. Such shareprices can rise
or fall within seconds. Shareholders therefore have to act quickly
in order not to miss an opportunity. Even a simple rumor can result in the demand for
a share falling fast regardless of the real value of the company. Of course the opposite is also possible. If a particularly large number
of people buy weak shares. Because if they see for example
great potential behind an idea. Their value will rise as a result. In particular young companies
can benefit from this. Even though their sales might be falling,
they can generate cash by placing their shares. In the best case scenario this will result in
their idea being turned into reality. In the worst case scenario, this will result in a
speculative bubble with nothing more than hot air. And as the case with bubbles,
at some point, they will burst. The value of Germany’s biggest thirty companies
is summarized in what is known as the DAX share index. The DAX shows how well or poorly
these major companies and there by the economy as a whole
are performing at the present time. Stock Exchange is in other countries
also have there own indices. And all of these markets together
create a globally networked marketplace. Subtitles by the community

100 Replies to “How The Stock Exchange Works (For Dummies)”

  1. What type of software do you use to create these type of graphics? How much is it and is it easy to use? Could anyone make videos similar to this easily? Cheers

  2. A huge pile of people receive money without producing any goods, or ulcers, nothing at all. Useless parasites.

  3. 2:17 easter egg. Taco inc changes to… idk… döner inc?

    Edit: döner is a turkish food, best made in the city of iskenderun and it tastes perfect.

  4. Schade dass das Video nicht auf Deutsch ist das hätte ich auch mal eins und zwei Arbeitskollegen unter der Nase gehalten

  5. Lately, YouTube has been translating the title of some videos, and in my mother tongue the title of this one says: how the stock market works(for dummies)

  6. Stock exchange is simply nothing more than a auction house. Where some insiders who agreed upon some hidden agendas will make you believe that a piece of toilet paper is worth more than a thousand dollars and they sell it to you for two thousand dollars while the demand goes up.
    Eventually they pull the trigger and the bubble blown and you came to know that you own a toilet paper. Who is the winner here? The elites make millions of dollars from scratch.
    My advice never invest your hardly earned money in stock market oherwise you can gamble.

  7. Who watches this today and because of the bubble example looks up from when the video is


    And yes they bursted

  8. I think the term "dummies" is really insulting, just because you have no knowledge about a certain thing doesn't automatically make you an idiot.

  9. When u understand stock exchange in high level: Cool
    When u understand stonks exchange: I AM A TRANSCENDENT

  10. Instead of being taught this… This simple info that took less than 4 minutes… I spent a semester of high school being taught how to fill out a check… The most basic shit imaginable…

  11. For people who still dont get it, Stock exchange is basicallly where you give money to a company hoping they will do well and if they do you get more money that what you put in.

  12. stock exchange market offer vast opportunities for self-sabotage trading the Forex market, as well as for self fulfillment. i can see price has tested a pivot high that appeared at the top the chart in current market. If you are profitable using Lukasz Wilhelm's IQD momentum strategy method too, I think you owe him a duty to spread the word and write honest reviews when needed.

  13. "even a simple rumor can result in shares falling fast REGARDLESS of the VALUE of the company"
    How true how true. And slanted , bias manipulation can affect sentiment in a second, articles printed at exactly before market open to influence .
    Real slimy

  14. If you don't understand it's becouse this system has no sense at all, it basically base economy on selling and purchase fictional shares. Companies, Values, Obligation, debts are sold and bought. But its all stuff none of em own. The wellness is produces by the workers that produce product and services from the resources the workers extract and work on. They just invented a complex but dumb system to get rich on YOUR work. Capitalism ladies and gentlemen, how to base a world economy on NOTHING, the periodical financial crisis are made of this.

  15. If the price of shares increases, companies can raise funds by setting the shares and expand. Can someone explain (elaborate) on the second part of the sentence?! Thanks

  16. Does anyone know where to find stock charts with minute by minute details? I can find yearly but nothing where i can go to a specific day and view the min by min….

  17. For Dummies Explanation: Stock Exchange. Stocks are basically shares. Shares are parts of a company. When you expect companies to do well, you buy parts of it so that when they make a profit they will share part of that money with you, which are called dividends. Exchange. Stock Exchange. Shares in exchange for money. The company sells part of itself so it can have money to open shops and buy their stuff. They don't just get 5M dollars and start a business.

  18. Our society is so complex I find it beautiful, our species can be galaxy brain level at times and others we are merely talking chimps.

  19. Actually it's not for dummies but they guy who's explaining here is a dummy himself he didn't even understand himself I'm out

  20. i made my first million trading stocks with the help of Mrs Nancy Berman Epstein..wonder why some people who are beginners wont trade with the guide of an expert..i find it dumb to be honest..why spend money on a market you dont understand? stocks isn't the casinos

  21. Basically stock market is where you buy company's for example you buy a McDonald stock, or you buy a McDonald but you don't technically own McDonald you own how much stock you bought, or how much McDonald stores you bought.

    Then you can sell your McDonald stock or save it by the chance of the stock increasing later. And gain profit
    You could also go downhill and McDonald have a bad incident and the stock decrease so you lose profit.

  22. I came here thinking I wouldn't get anything…
    Surprising I learnt this in fourth grade (10 years old)


  23. What is the actual relationship of the shares to the company though? Like it is it (conceptually) just a piece of paper with the name of the company printed on it. Or does it actually give some control over the actions of the company or some benefit if the company succeeds? Otherwise it just seems like a market in collecting corporate "baseball cards" that only have value because of the market for them and really have no intrinsic connection to the corporations.

  24. in even simpler words they buy a part of the company in the form of shares then when the company earns money the value of the share increase for example if you got 1% of facebook company's share for 1 million dollars then when it earns some money the value will increase to something like 1.1 or 1.5 million dollars
    btw im 14 and understood this so if you cant then ur an idiot (no offence)

  25. i made my first million this year through trading with the help of Mrs Julie Ann Cato. She handles all trades and investment for me. She is a genius at her profession

  26. If you need a reliable trader to walk you through success in trading binary options and Forex trade. I will recommend Andrew Feldstein

  27. this video might not help everybody, i invested about 150,000AUD in stocks as a beginner with professional guidance from one Madam Nancy Berman Epstein who happens to have grown my portfolio up to 850,000AUD in a few months. she is very popular in the States

  28. The best way to make money as a beginner, is to invest with an expert trader who will trade on your behalf and pays you your profit at the end of the trade.
    Thanks to a genius like Edward Thompson I was able to make a total of $39,000 dollars on my last investment. He higher your trading amount the easier it is for you to make more profits.
    Me and my colleagues have been trading with him for months now and he has never disappointed us. Mail him if you want to make profits trading ^^edwardthompson227 @ gmail. com^^.. Thank you sir you are the best.

  29. But the title is quite insulting. Are you sure we were taught before, but because we are dummies we could understand and now you have made a video for us?

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