HOW DOES THE STOCK MARKET WORK?
On
the trading platform, there are “Buy” and “Sell” and “Last” done price
quoted. Also, there is "Buy Vol" and "Sell Vol". What do they mean?
Here's what we see with the stock SINGTEL:
JUST LIKE BUYING APPLES
Stocks,
in a very general concept, represent ownership in a company. Buying
stocks in a stock market is very much like buying apples in a fruit market.
Everyday,
when
the fruit market opens, people who want to buy apples or sell apples
will gather in a large open field. Everybody's very civilised here,
so they will queue up. At the front of the buy queue, there will be a
signboard displaying the price at which buyers are willing to
buy apples at. Likewise, at the front of the sell queue, there will be a
signboard displaying the price at which these sellers are willing to
sell apples at.
Let’s say that today apples are
transacted at $2.49. At the buy side, there are buyers
lining up in the $2.48 queue, the $2.47 queue, the $2.46 queue,
and so on. On the sell side, there are sellers lining up at the $2.49
queue, the $2.50 queue, and so on. Then
a buyer comes, he's really hungry and he wants to buy a few apples now,
he will then buy apples directly from the first $2.49 seller. So, $2.49
becomes the last done price, and the SellVol will decrease.
Likewise,
if a seller really wants to sell his apples, maybe because
he has an over-harvest of apples, he will sell his apples directly to
the first $2.48 buyer. When that happens, $2.48 will become the last
done price, and the BuyVol will decrease.
And
that would only be
for apples, which is liken to just a single stock like SingTel on the
stock market. Thus, the stock market on the whole, is just like a really
huge fruit
market, with tons of different kinds of fruits, and thousands of buyers
and sellers everyday.
Name means the stock name.
BuyVol means the volume (3,631,600 shares) queuing to buy at $2.48.
Buy means the best buy price $2.48 on queue.
Sell means the best sell price $2.49 on queue.
SellVol means the volume (316,800 shares) queuing to sell at $2.49.
Last means the last done price.
Now, let's look at the next part.
Volume means the total volume transacted from market opening till now.
Prev means previous, which means the closing price of last market day.
Open means the opening price of today.
High means the highest price transacted during the day.
Low means the lowest price transacted during the day.
There are so many stocks listed on the stock exchange. A good way to start is to look at the stocks listed on the Straits Times Index (STI), also known as "BlueChips". The STI is regarded as a benchmark for the Singapore stock market. It tracks the performance of the top 30 companies listed on the Singapore Exchange. These companies are large and typically stable; some contribute to Singapore’s economic growth. When you hear the newscaster talk about market being "up" or "down" today, they are typically referring to the STI Index.
The latest constituents can be found on the SGX website here.
The constituents do change over time so be sure to check back with the SGX website.
REITs
Reits are real estate investment trusts which typically give regular dividends.
You may find out more about REITs on the SGX website here.
REITs are very popular on the Singapore market hence there are many blogs around which write about setting up a dividend portfolio.
You may want to read:
