Profile
Settings
Refer your friends
Sign out
Stock trading and market investment are two important aspects of a capitalist society. Today, capitalism holds sway all over the world. We are all part of a consumer culture as everything around us is commodities. To put it simply, nothing exists outside the market.
The stock market largely hinges upon the trading of stocks, and it is also predominantly volatile. Stock market volatility refers to the fluctuation or unpredictable movement of stock prices in a given period. This volatility is further influenced by market performance, growth and economic conditions in general.
What is the Stock Market?
The stock market is an inevitable part of the current global economy. The term stock market or global stock market means a set of markets and exchanges that promote trades, bonds, and equities and assure other market securities. In addition, the stock market offers different companies or capital holders access to capital (stocks) transactions for a significant amount of legal authority.
The stock market is also referred to as the equity market. And here, stock can be described in various ways.
History of Stock Market
The concept of the stock market can be traced back to as early as 1500. For example, in the 1100s, France had courtiers de change that dealt with agricultural debts. Later, in the 13th century, Venice Merchants also gained the government’s trading securities.
The world’s first genuine stock market is associated with Belgium. The Netherlands established their stock market in the 1400 century. The East India Company was first recognized as a trading company. Before people put their feet in the online stock market, coffee shops served as their physical meeting points. Here, people used to share stock information by writing it on paper and circulating it among interested people.
Currently, every country has their own stock market. And this became possible only after the historical establishment of the London stock exchange (1810) and the New York stock exchange (1817). Although the London stock exchange was not permitted to exchange stock initially, the New York stock exchange has been changing stocks from the beginning.
What is Stock Market Volatility?
The frequency and dimensions of upward or downward mobilisation of the market price are defined as stock market volatility. The aspect of market volatility is very common in any investment. It is measured by identifying market price changes in a certain period.
And with the changing market price frequency, the whole trading market can be divided into two parts 1) bearish market (downwards trading) and 2) bullish market (upwards trading). High or risky market volatility is associated with a bearish market.
What is Stock Market Sentiment?
Stock market sentiment refers to how many short-term and even long-term traders try to understand the direction of market price movement. It is an integral part of the process of efficient market hypothesis. This process ensures that you do not lose investments.
VIX (CBOE volatility index), also known as the ‘fear index,’ Bullish percent index, moving averages, High-Low index, COT or Commitment of Traders report, are common technical market sentiment indicators. These indicators help one to predict bearish (downward) or Bullish (upward) movement of market prices which is very helpful to deal with the risk factors of stock market volatility.
What is Stock Market Attention?
The term attention in the stock market is associated with investors’ attention. Understanding and successfully drawing targeted investors’ attention to a given stock is vital in ensuring positive stock returns. Investors’ attention to a commodity is usually drawn through social media marketing. The attention of investors can be of two kinds- Intra attention and Global attention.
Investors’ attention is generally measured through various social media platforms like Google, Twitter, Instagram etc. But in addition, stock market analysts play an important role in measuring investors’ attention. For example, Google provides the SVI or Search Volume index, which tells a lot about the interest of investors. And an analysis of these attention indexes helps develop stock market policies according to current trends.
Importance of Sentiment and Attention Assessment in the Stock Market
Understanding investors’ sentiment and analysing their attention are important factors in the stock market. Social media platforms play a vital role in understanding these factors. Further, having a clear idea about the upward or downward movements of stocks helps investors to escape the consequences of negative volatility.
Also, while investors use the market sentiment to ensure a positive return on stocks, Investors’ attention is a strategy used by capitalist firms to draw the attention of specific investors.
Conclusion
Market sentiment and attention can be built through various marketing strategies. The most important of these strategies hugely rely on social media platforms such as Twitter and Google. But polarity dominates both of these factors. There can be good market sentiment or bad market sentiment and positive attention or negative attention, which further influences stock market volatility.
The movement of stock market prices can either be upward (Bullish) or downward (bearish). And wise use of market sentiment and attention can save you from negative volatility.
