How The Stock Exchange Works (For Dummies)

By | February 26, 2020


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 Amara.org community

100 thoughts on “How The Stock Exchange Works (For Dummies)

  1. Kurzgesagt – In a Nutshell Post author

    There's brand new stuff in the Kurzgesagt Merch Shop. Check it out here: shop.kurzgesagt.org

    Reply
  2. tico Post author

    but as a person , why would i buy shares from a company. what are the benefits in my getting a share?

    Reply
  3. xCyborg Ninja Post author

    How about you guys make one for f**king god damn retrarded dumb ass then I will understand

    Reply
  4. Ali Hassan Post author

    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)

    Reply
  5. M.Tugce Post author

    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

    Reply
  6. Duarte Ezequiel Eloi Post author

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

    Reply
  7. Jessica Bruce Post author

    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.

    Reply
  8. Wajak Jijiri Post author

    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?

    Reply
  9. Hiroshi Rupasinghe Post author

    So what they are saying is that these shareholders sell stuff from your share and give a percentage of it annually along with the money they gave you by buying your share?

    Reply
  10. Sriram K Post author

    *After watching the video
    “Am I the most dumbest human on the planet?”

    Reply
  11. Andrew Stroev Post author

    Soooo… If you buy all the shares there are, did you just buy the entire company?

    Reply
  12. Felix .C. Olofsson Post author

    I have advised some people in the past to take up trading in stock market as full time or part time activity.

    Reply
  13. Marcus Rashford Post author

    Whose here trying to figure out the man utd and the Saudis situation

    Reply
  14. Pro Pro Post author

    Guys, the stock market is from my experience, a beautiful masterpiece of the business world. I trade with my bank's platform and it gives you all the information of any company you look up to determine their worth. We ourselves have a stock value, it's about being relevant and productive in society. Your ethics are even challenged: would you buy shares in some scummy tobacco company? WELL there are less and less smokers in this generation so all the tobacco companies are falling and your investment wouldn't be so secure. It's such basic business of where you place your money to what you believe in based on your knowledge of the world and it's needs. Weed company stock arent doing so well cause people still buy from their dealers for example

    I get hesitant cause I like to buy when the market goes down so that I can ride the bull when it goes up and I make capital gains.

    Reply
  15. محمد العوادي Post author

    The title is hilarious. The content is great!

    Reply
  16. Iqra Bhatti Post author

    I spent 5 mins watching the advertisement all because the advert was related to stock markets ahha I didn't have any idea I was watching a ad until I looked at the yellow line

    Reply
  17. Moustafa Kamal Post author

    But who decides whether the share has lowered in value or risen

    Reply
  18. Yaniv Eidelnant Post author

    How could you not even talk about death and the universe in this video!

    Reply
  19. Brad Au Post author

    I just got a stock exchange advertisement from this vid no joke lol
    like if you did

    Reply
  20. OddFat Of Post author

    Só if I buy 10 slices of pizza for 10 euros and after 3 months each slice now it’s worth 50 euros now I need to sell it before it crashes right ? Ok if the answer is yes tell me who going to buy my share ? Aren’t they risking it ?

    Reply
  21. Jose Alberto Post author

    do you need the indexes to trade I don't get it when in an online platform you buy x at 1 and want to sell at 1.30 what's happening behind. is the algorithm automatically placing orders or are there peoe behind ??

    Reply
  22. Chrisman Gerald Post author

    this is all good info, made my first million trading stocks with professional assistance from mrs Nancy Berman Epstein, she handles my investment portfolio and she is popular in the U.S

    Reply
  23. Oh Ngonoo Post author

    back then while kurzgesagt didn't use too much tone on its video. Just keep it simple, functional, on point.

    Reply
  24. 7lllll Post author

    what is that gigantic stock exchange in argentina or chile or peru? why is it so big in this video?

    Reply
  25. Franklin Hardy Post author

    If you are investing in a stable company and the stock declines but the company is still sound, the price drop is a buying opportunity not a time to sell. Yes, if the company or it’s market has changed it might be good to exit the position.

    Reply
  26. Ryan Post author

    This video is recommended just after paying for "The Wolf of Wall Street" on Google Movies..

    Maybe I should set up my own Stratton Oakmont Inc.

    Reply
  27. MrZer000 Post author

    So: A young company sells most of its stakes and expands using that income. As a result the value goes up. How is it gonna benefit them if there are no more staks left to sell? At the end they sold all of their stakes at a low price and now theyre worth a fortune now that they dont own them anymore… i dont get the point

    Reply
  28. Furkan - Post author

    🔥‼🔥Trading in the Forex Markt is the best option where you can earn easy much Money 💰💸🔥🤳we live in 21 Century! For more information text me immediately 👍

    Reply
  29. Mr Cattums Post author

    1. whats a share?
    2. how does the company get any benefit from this?

    Reply
  30. buster117 Post author

    When the title of the videos calls users 'Dummies' it certainly turns people away. Who wants to click on a video that is calling him/her dumb. Apparently Kurzgesagt was smart enough to understand the the stocks market but dumb enough to choose that title.

    Reply
  31. Twitch_StarLord_ Post author

    Ty for nice vid informative epic yes.
    ~Random Internet Starry-boy from Discord uwu☆♕

    Reply
  32. Miroslav Raven Post author

    it's soo simple and obvious, everything is based on logic, how there are people that don't understand this ? geez

    Reply
  33. Samantha Gruber Post author

    The risk of trading Stocka is that if you get the wrong direction then it has a chance of blowing a hole in your account and end up losing all of your money.

    Reply
  34. David Onell Post author

    I created my 1 million dollar portfolio on stock investment with the help of of very popular stock broker Joanne Mary Granchelli ,, who I met in a conference ion L.A

    Reply
  35. Daniel L Post author

    The one thing that I think people always fail to mention, is that (in this example alone) a company ONLY makes money from the IPO, and never in the secondary market which is what most of the shares generally float around in.

    Reply
  36. John Smith Post author

    Actually, the Stock Exchange is legalized gambling where the House always wins.

    Convert your money into gold bars, keep in your possession, and YOU (and only YOU!) control your wealth.

    Reply
  37. Useless Taco Post author

    This is the third video I have watched today on the Stock Market and I still don't get what it's all about :/

    Reply
  38. Michael Brodie Post author

    Buy low. Sell high. Ride the S&P for a decade with a lump sum infusion. Triple A bonds. It ain't rocket science.

    Reply
  39. Veni Vidi Amavi Post author

    it makes a lot of sense….and then all the acronyms start getting added in

    Reply
  40. Meowing Meows Post author

    Woah, it hurts so much when you still don't understand the video after watching. Smh I am 21.

    Reply
  41. Hamza Raja Post author

    Thankyou, I struggled to understand it even after studying economics at O and A levels

    Reply
  42. Willy Alvaro Post author

    Who else is still confused after watching this entire video?

    Reply
  43. Manju Murugan Post author

    This is the very best video for students. l the video.

    Reply
  44. Talia Alexander Post author

    I make money trading the stock market although its so difficult to understand but some how mr gabe kellough have been making profits not just for me and him self but for every investor who trade with him

    Reply
  45. shamailah1 Post author

    I just feeling a pizza now after seeing the pizza 🤷🏻‍♀️

    Reply
  46. katie breed Post author

    I made my first million investing in the stock mark as a beginner , The woman who assists me is Mrs Joanne Mary Granchelli she agreed to handle my stock trade after we met a her conference in Canada , with the help of Mrs Joanne Im counting my 3rd million this year, I'm grateful

    Reply
  47. Fuck You And Your Ideology Post author

    There's a reason most people don't get it. It's because you're not supposed to get it, it's a fucking ponzi scheme.
    You have to ask yourself who are the people behind selling you these shares. Who are those buying the initial shares to determine the "market" price? And who has enough money to dump in to control that market price?
    It's robbing by the rich from the poor, people. Wake up.
    And that's only if the market prices are not controlled digitally. Remember, everything runs on computers. Why would you even get close to that? Trading is presented as such a professional and serious activity and there are a few who they let win to make others think it's legit. BUT MOST PEOPLE LOSE.

    Reply
  48. Prime Royal Post author

    When you use algorithm to make idle profit from stock market
    Youtube: Here is your crown.

    Reply
  49. Prime Royal Post author

    2:22 Can you guess what is in top-right corner?
    😏😏😏

    Reply
  50. Peter Elvis Post author

    How will you feel making up to $4, 431 within 40 to 45 minutes?
    It's seem impossible to you right? Stock market and forex has always been profitable unknowing to you.
    These secrets that REAL traders use in the Live Pits to make money every single day…  is best known to harper James a pro floor trader in the world…contact him harperjames 366 (@) gmail, com he's always open to new investor's anytime.

    Reply
  51. Maxxrevv Post author

    All the worlds billionaires call each other when there want to sell their stocks and they make money while everyone else loses.

    Reply
  52. Kim Sung je Post author

    I have seen a lot of positive reviews about stock investing services and it is highly lucrative. I believe investing with an expert is a guaranteed step to success.

    Reply
  53. KIBanshee9 Post author

    Man…I love Kurzgesagt but I feel like I need a "stock market for absolute utter morons" 😂

    Reply
  54. Stanley fujiwara Post author

    Brilliant observation…making my first million became a reality when i started trading stocks as a beginner with the help of Mrs Sandra Gail Gaines who handles all my investment portfolio… her name is getting big in the US

    Reply
  55. Marlon Elias Post author

    Can you guys also make a video about the remittance market.

    Reply
  56. Michael Brown Post author

    As a beginner, I’ve come to realize that experience beats hardwork, I made weak profit investing on my own, but since the past 2months I’ve been investing with the guidance of a professional, i’ve made over $375,000 Profit using a capital of $120,000

    Reply

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