How are stock prices determined?
Stock prices are determined by market factors just like any other good you buy.
The more people looking to buy a stock, the more expensive it is and the more people that look to sell a stock, the more its price would fall.
Of course, buyers and sellers don’t (or at least shouldn’t) trade without reason.
Since each share represents a piece of the company you are buying a buyer/seller would first calculate how much a business is worth.
Say they value a business at RM100 million. The company has 1 million units of stock outstanding – that is, there are 1 million units of the company stock that are traded on the market. Therefore, each unit of stock is entitled to RM100 of value.
The decision to buy or sell the stock then boils down to whether the current market price reflects what you think the stock is worth.