Translation under review. The illustrations are still in Portuguese.
"The price blinking on the screen is just the last handshake between someone who was dying to sell and someone who was dying to buy."
You stopped in the middle of this chapter.
There's no official price. Nobody decides what a is worth. There's no manager. There's no price list.
There's a buyer saying "I'll pay R$10.00" and a seller saying "I'll only sell for R$10.02". While the numbers are different, nothing happens. When one of them gives in and the numbers match, the deal goes through. That number becomes the price.
The used car rule. An everyday comparison. The Fipe table (Brazil's standard used-car price guide) says your car is worth R$50,000. But if you need the money today and the only buyer in front of you offers R$45,000, the price of your car, today, is R$45,000.
Supply and demand. That's all. And a bit of psychology: whoever needs it more gives in first.
A thousand times a minute. On the stock exchange nobody actually shakes hands: "handshake" is just a way to name the deal. That deal happens thousands of times a minute, between thousands of pairs. Each deal moves the price a little. That's why the number on the screen never stops blinking.
Price isn't value. The price is what someone paid just now. The value is what the thing is really worth. Most of the time the two stay close. When they drift apart, someone is too scared or too excited.
Words in this chapter
Share (stock)
A small piece of a real company. If the company grows, the piece tends to be worth more.
