1: demand definition
2: how demand works
3: demand vs price
4: benefits of demand.
Opening information:
Demand means to request or order some materials or matters from more things. The request is from the people or people to buy something.
When the request or order increases over and over, it becomes rare among buyers. This rarity
is called demands and more for certain things.
Now this article contains information about what is demand, how demand works in the stock market, what is the difference between demand and price, and finally what is the benefits of demand.
1: demand definition
The old materials of anything in the world always came to the auction market.
In the auction market, there are lots of buyers to buy the valuable and useable items.
The items which are not sold are never at a standard price. Some of the materials are sold for intermediate price and Some items might be sold for very high price.
When the item of anything came to the auction market, the auction item would start at the initial price.
The price of the initial item would be determined by the holder of the items.
After the price is announced to the buyer in the auction market, the buyers are allowed to bid on the starting price of the product.
Once any of the buyers bid for more than the initial price, then no one buys the same item at the initial price because the increase in the price bid is called demand.
Say the item is started at the price of 1000 dollars in the auction market. And if any of the buyers in the auction market bid the price of $1200.
Then no one in the auction market would buy the same item for 1000 dollars, they would only have the chance to bid more than $1200.
This makes the buyer bid more than $1200 because of no chance to buy the item for less than $1200.
The buyer would bid $1300 then another bid $1400, next another buyer bid $1600, and after the item reaches $1600 no one is ready to bid.
so the increase in bids is stopped which means demand for certain items would be stopped.
So the item is sold for $1600 instead of 1000 dollars as an initial stage. This same applies to the stock market so let’s dig into the demands in the stock market.
2: how demand works
When the Publicly traded Companies issued stocks in the exchanges. The shares are listed at standard at the initial price.
After the listing of shares. The listing of shares rises and falls based on the demand for certain securities.
If the shares are $7 if anyone buys more stocks than the standard it moves the share price up.
On the other hand, if anyone sold bulk shares suddenly the share price of the particular securities would fall because of a decrease in demand which means no one is willing to bid more than above certain price.
The standard means the market wouldn’t be moved by a small purchase of a single share, when the purchase of stock is big, the stock price would move because of a lack of sellers in the same stock.
If no one sells the shares of stock in one company and there is a huge amount of buyers on the other side, this makes the company shares very hard to buy on the market.
So the shares become very demand among investors and to increase the price of shares is very high up to more than $7.
But that doesn’t mean price or demand is the same. It has some differences so let’s dig into it.
3: demand vs price
The demand for any shares is not seen in the stock market, so instead the demands are shown using the price in the stock market.
If the price of shares is much higher than a certain company income, the investors are willing to buy that share for a high price, which means it is in high demand.
If the price decreases from the high peak and not enough risk it’s shows low demand for certain shares of the company. But by having High demand there are huge benefits for the Publicly traded Companies.
4: benefits of demand.
When one industry shares have demand on the market, the price of the shares would increase consistently.
The demand is created by the Investor’s decision to purchase the stock.
The investor decisions are made by the company’s performance. So when the permanence of the company is so high, The company would able to sell their ownership of the shares more than they expected in the high price in the stock market.
Market rule: #100191
Demand is the market rule, it is impossible to avoid the demand concept to run the stock market, Demand is the very crucial market rule.
Ensure your method aligns with demand.
If your investors are not comfortable or align investing with based on market rules please learn about how to regulate your investments under your control with the use of Rule investing.