What does “points” mean in such contexts (stock exchange, I believe)?
"What does ""points"" mean In any stock market, there are certain stocks that go up and certain stocks that go down. Hence if we want to find the generic health of stock market, i.e. on an average is it going up or down, we have no means to find out.  A practise that has evolved over the years is take a set of companies and find if on average they have gone up or gone down. In very simple terms say in 1970 I take the Market Capitalization of a set of 50 companies, lets say its value is ""X"". I would now call this index as value of 100. Now after a month if the Market Capitalization is 2X, the index value would be 200. After another month if the Market Capitalization come down to 1.5X, then index value would be 150. So essentially now one is able to get the general trend more easily. S&P is an index of Select 500 companies based on various parameters. So in isolation 2000 does not mean anything. However as a comparison it does give quite a bit of insight. Note there are various adjustments made to factor, i.e. certain companies go bankrupt or are not doing well are removed from Index, share splits, mergers, etc. This ensure that the Index is neutral and does not show unwarranted spikes." Points are the units of measurement of the index. They're calculated based on the index formula, which in turn based on the prices of the underlying stocks. Movement in points is not really interesting, the movement as a percentage of the base price (daily opening, usually) is more interesting since it gives more context.
If the fact that currency is based on fiat, something that has been the case with currency somewhere on Earth since the Tang Dynasty of China discovered paper money a long, long time ago, leaves you up in arms, then I shudder to think what an explanation of how the price of money can be derived from plotting IS and LM together and extending it's meeting point into the money market to determine the price of currency would do to your notion of control by powerful offices in government.  My good sir, have you ever considered that YOU might be the smug moron?  That YOU might be the one who just found out what everyone in the room already learned years ago and lack the foundation the rest of us have to understand that information in context?  That it might be YOU who are uninformed?  I'll quote you right here:  &gt;people who have no clue what the fuck they are talking about go off and lecture other people, bringing up facts that have no thought behind them, and are merely definitions posing as an argument. Making a statement, then getting corrected, then coming back and simply lengthening the original answer is not an argument.  &gt;I'll say it again: our currency is fiat. It is backed by nothing  You don't seem to understand just what it is backed by.  It is backed by trust, steady demand, and the assurance of powerful national and international bodies.  As is the price of everything, including gold and literally every other commodity on the planet.  Your utter shock and outrage upon discovering this minute fact does not indicate a revolutionary zeitgeist or that you are some kind of free spirit, it indicates that you are uneducated on the context of basic and well understood facts that the rest of the educated world is already caught up on. This is why Singapore's economy makes the most sense, the government has a huge sovereign wealth fund where the government actually owns a sizeable portion of the economy/businesses, i believe this is called 'socialism', but done through their stock exchange (and foreign exchanges too), and the returns go back towards people's social security accounts and also funds government programs.  Norway also does something similar. "It's simply supply and demand.   First, demand: If you're an importer trying to buy from overseas, you'll need foreign currency, maybe Euros.  Or if you want to make a trip to Europe you'll need to buy Euros.  Or if you're a speculator and think the USD will fall  in value, you'll probably buy Euros. Unless there's someone willing to sell you Euros for dollars, you can't get any.  There are millions of people trying to exchange currency all over the world.  If more want to buy USD, than that demand will positively influence the price of the USD (as measured in Euros).  If more people want to buy Euros, well, vice versa. There are so many of these transactions globally, and the number of people and the nature of these transactions change so continuously, that the prices (exchange rates) for these currencies fluctuate continuously and smoothly. Demand is also impacted by what people want to buy and how much they want to buy it.  If people generally want to invest their savings in stocks instead of dollars, i.e., if lots of people are attempting to buy stocks (by exchanging their dollars for stock), then the demand for the dollar is lower and the demand for stocks is higher.  When the stock market crashes, you'll often see a spike in the exchange rate for the dollar, because people are trying to exchange stocks for dollars (this represents a lot of demand for dollars). Then there's ""Supply:"" It may seem like there are a fixed number of bills out there, or that supply only changes when Bernanke prints money, but there's actually a lot more to it than that.  If you're coming from Europe and want to buy some USD from the bank, well, how much USD does the bank ""have"" and what does it mean for them to have money?  The bank gets money from depositors, or from lenders.  If one person puts money in a deposit account, and then the bank borrows that money from the account and lends it to a home buyer in the form of a mortgage, the same dollar is being used by two people.  The home buyer might use that money to hire a carpenter, and the carpenter might put the dollar back into a bank account, and the same dollar might get lent out again.  In economics this is called the ""multiplier effect."" The full supply of money being used ends up becoming harder to calculate with this kind of debt and re-lending.   Since money is something used and needed for conducting of transactions, the number of transactions being conducted (sometimes on credit) affects the ""supply"" of money. Demand and supply blur a bit when you consider people who hoard cash.  If I fear the stock market, I might keep all my money in dollars.  This takes cash away from companies who could invest it, takes the cash out of the pool of money being used for transactions, and leaves it waiting under my mattress.  You could think of my hoarding as a type of demand for currency, or you could think of it as a reduction in the supply of currency available to conduct transactions. The full picture can be a bit more complicated, if you look at every way currencies are used globally, with swaps and various exchange contracts and futures, but this gives the basic story of where prices come from, that they are not set by some price fixer but are driven by market forces.   The bank just facilitates transactions.  If the last price (exchange rate) is 1.2 Dollars per Euro, and the bank gets more requests to buy USD for Euros than Euros for USD, it adjusts the rate downwards until the buying pressure is even.  If the USD gets more expensive, at some point fewer people will want to buy it (or want to buy products from the US that cost USD).  The bank maintains a spread (like buy for 1.19 and sell for 1.21) so it can take a profit. You should think of currency like any other commodity, and consider purchases for currency as a form of barter.  The value of currency is merely a convention, but it works.  The currency is needed in transactions, so it maintains value in this global market of bartering goods/services and other currencies.  As supply and demand for this and other commodities/goods/services fluctuate, so does the quantity of any particular currency necessary to conduct any of these transactions. A official ""basket of goods"" and the price of those goods is used to determine consumer price indexes / inflation etc.  The official price of this particular basket of goods is not a fundamental driver of exchange rates on a day to day basis." "I've alway thought that it was strange, but the ""price"" that gets quoted on a stock exchange is just the price of the last transaction. The irony of this definition of price is that there may not actually be any more shares available on the market at that price. It's also strange to me that the price isn't adjusted at all for the size of the transaction. A transaction of just 1 share will post a new price even if just seconds earlier 100,000 shares traded for a different price. (Ok, unrealistic example, but you get my point.) I've always believed this is an odd way to describe the price. Anyway, my diatribe here is supposed to illustrate the point that the fluctuations you see in price don't really reflect changing valuations by the stock-owning public. Each post in the exchange maintains a book of orders, with unmatched buy orders on one side and unmatched sell orders on the other side. If you go to your broker and tell him, ""fill my order for 50,000 shares at market price"", then the broker won't fill you 50,000 shares at .20. Instead, he'll buy the 50 @ .22, then 80 @ .23, then 100 @ .30, etc. Because your order is so large compared to the unmatched orders, your market order will get matched a bunch of the unmatched orders on the sell side, and each match will notch the posted price up a bit. If instead you asked the broker, ""open a limit order to buy 50000 shares at .20"", then the exchange will add your order to the book: In this case, your order likely won't get filled at all, since nobody at the moment wants to sell at .20 and historically speaking it's unlikely that such a seller will suddenly appear. Filling large orders is actually a common problem for institutional investors: http://www.businessweek.com/magazine/content/05_16/b3929113_mz020.htm http://www.cis.upenn.edu/~mkearns/papers/vwap.pdf (Written by a professor I had in school!)" You don't see Buying and Selling. You see Bid and Ask. Best Bid--Highest Price someone is willing to pay to buy a stock. Best Ask - Lowest price someone is willing to accept to sell a stock. As for your second question, if you can look up Accumulation/Distribution Algorithm and Iceberg Order, you will get basic idea. "I think the author is really on point here. Just read r/investing or seekingalpha or some other forum with low barriers to entry and you see the same phenomena. People like drama, and there's a convergence towards dramatic opinions and extremes. The scariest part is that while stock valuations are fairly subjective, it is very common to see top reddit comments that are verifiably false, on financial subjects or otherwise.  At some point, I'd really like to take a web scraper to r/investing and see what the relationship between comments on certain companies and their stock performance is. Similarly, it'd be interesting to see if people who are right tend to stick around/people who stick around are more often correct. It'd also be interesting to compare the ""reddit consensus"" with actual analyst consensus and to see where it differs. It might make a good master's thesis.   On the other hand, I'm not convinced that the traditional punditry is necessarily better. Professionals are generally more articulate and ought to be able to highlight the relevant details in a company or sector. However, the 2 minute segments they have with these professionals on CNBC are basically just noise when compared with hour long analyst calls, and I've never found them particularly useful for extracting more than a very 1000-kilometer high view on a topic that I know nothing about.  I think longer form publications like actual interviews, where the guests are on for a longer period of time, or print articles from WSJ/FT/etc. are still good quality, but even financial media has really been catering to the lowest common denominator with free or televised content.  In any case, I think this really reduces down to an issue of critical thinking. Random internet comments can actually be really insightful, or garbage, but most people can't discern the two. I think the same applies to punditry too, however." "It means price movements in the past do not affect price movements in the future. Think of the situation of a coin, if you flip it once, and then you flip it a second time, the results are independent of each other. If the first time, you flipped a HEAD, it does not mean that the coin will remember it, and produce a TAIL the second time. This is the meaning of ""memoryless"". FYI, stock markets are clearly not memoryless. It is just an assumption for academic purposes." the implications are that the company's earnings per share may seem greater, (after the company buys them there will be less shares outstanding), giving wall street the impression that there is more growth potential than there really is. its an accounting gimmick that can work for a few quarters while the company evaluates how else to impress wall street