How exactly stock prices are calculated?

General
1

Hi, how exactly stock prices are calculated(with formula)?
What is the calculation of demand and supply?

2

  1. No one knows , and is impossible to know as well , if anyone knows that formula they can predict anything and everything .

  2. Assuming you are novice in the market , PE is the best possible ratio which gives some notion whether stock is over valued or undervalued .

  3. compare individual PE to industry PE you will get fair idea . Also there is no formula as such for demand supply all depends on how one values .

  4. Pls remember value of asset is not dependent on the asset , it is in the mind of the person who is holding it and what he can do with it .

  5. one recent example i can give , ABFRL had become so worthless until amazon tried to acquire and now reliance jumped so it all depends who sees value and in a time frame.

3

So how the stock price is determined by exchange(NSE/BSE) technical infrastructure in real-time? I mean there must be something from a technological point of view.

4

There are millions of orders coming every second, The momentary consesus of price between a buyer and seller is the Last traded Price (LTP), There is an order management system at exchange which takes care of order matching in real time. Stock Exchange do not determine the price, It only provides a space for Buyers and sellers (Supply and Demand) who will determine the price.

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5

That means LTP is the real-time CMP. Correct?

6

NSE and BSE does not determine the pricing , they only regulate .

But the actual price of the stock say x is defined as only by LTP that is last traded pricing where in which buyer and seller came to a agreement on that price thats the only thing that happens.

if you want to know how it works on the begening day try looking at IPO process you might get good perspective coz that is the starting point and from then onwards its just the regulation by NSE/BSE saying in one day you cant cross 50%/20% /10%/5% depending up on the market cap .

if you closely follow the stock prices even though they close at x price by 3:30 , but if you look again at 4pm there will be a difference of 1-2 rs . they take the entire day weighted average trades and they have some formula and update at 4 pm.

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7

Weighted average is taken for only last 30 mins.
Thats 3PM to 3.30PM