What Causes Stock Price to Rise or Fall?
I get that when investors sell the stock the price of the stock goes down and vice versa... but isn't a typical investor selling the stock back to the broker dealers? AKA every time someone is selling a stock someone on the other side has to buy it?
In other words, there are a set number of shares (say for a certain time period), when someone buys a sells a stock, someone has to buy it. Why is the price dropping then?
Momentum, # of sell orders > # of buy orders. More people sell and lower priced buy orders get filled
Because the seller wants to sell more badly than the buyer wants to buy relative to the previous price and thus the seller is willing to compensate by selling at a lower price.
Sharp drops and rises in stock prices (Originally Posted: 04/13/2010)
Hi guys. There is always something that has made me curious when looking at stock graphs... is there any solid explanation for sharp drop and rises in prices? For instance, I often see a sharp 60% drop for a few seconds and back to the original price. Would appreciate any input
60%? That's a huge drop. Especially in seconds.
Don't buy penny stocks, kid. Haven't you seen Boiler Room?
yikes......
Explanation: There is someone out there who can control the price by buying/selling a lot of shares based on the spread.....it's likely the same person telling you to buy a certain penny stock.
With illiquid penny stocks, most of which are traded OTC, the bid/ask spread is very wide, making the actual price of the stock on your PA home page look like it's swinging back and forth in seconds. This is not good for limit order traders....in fact it's really not good for anyone for that matter, and unless you're only investing a couple hundred dollars and are okay with huge risk exposure, I'd say stay away from anything that volatile.
Steve Cohen got fired once for buying just 100 shares of some penny stock off the market at his desk, people saw steve cohen bought xyz and over valued it, after a day people realized this is BS and all the people who invested in XYZ lost all their money when the price was corrected by people unloading it. Doing that kind of things isn't illegal; it's unethical, and I'm pretty sure that's how he got fired/was asked to leave from his job before he started SAC Cap.
Any ways, that's what people are likely doing to you.
A lot of times those trades never actually happen. Someone screwed up an order, it gets filled, then canceled.
probably a fat finger as revsly said. those are most likely just errors that usually end up getting canceled.
Is there a site that offers in-depth analysis of the increases/decreases in stock prices? (Originally Posted: 01/18/2008)
(Disclaimer: If there's already a thread about this, I apologize. I honestly had no clue what to search for.)
I recently got very interested in the market, and now I'm looking at the performance of various stocks. However, because I just got started, I don't know why company stock prices have been moving the way they have. Is there a website that shows a 3-month (or 6-month, or year, etc...doesn't matter) graph on stock prices with points that show significant events? In other words, I'm looking for something that explains why the stock prices went up or down (significant changes, obviously).
For example, Apple's stock skyrocketed when Jobs announced the iPhone (Jan 2007). This year at MacWorld, Apple's stock dropped because consumers were expecting more from Apple (consumers were disappointed).
Is there a site that would show these events on the chart?
Thanks for your help!
is my fave.
also try something as basic as google finance.
unfortunately price graphs that also act as a company timeline is extremely difficult to find. Usually its just been chart thats been annotated by someone, that would be tricky to program a computer to do. If you find something please share. Otherwise manually do your own homework.
stock price fluctuation (Originally Posted: 03/14/2014)
I. What causes the price of a stock to fluctuate on the trading screen?
OR
II. And how did stock prices fluctuate before the electronic systems came into place?
A. Did the broker decide
OR
B. Was it argued by buyers and sellers till they came to an agreement
and if the answer is B ... then isn't it possible that stock could possibly be selling at two different prices at the same time? because of more than one broker or more than one pair of buyers and sellers?
Don't get confused with the bid/ask numbers and actual trade numbers you see flying across the tape. When someone buys a stock, they either pay the ask (take liquidity) or post a bid and wait for a seller to take the bid (provide liquidity). If they pay the ask, they're paying the NBBO (national best bid offer), or simply the lowest offer on all of the exchanges.
When people are aggressively paying the offer, sellers will naturally raise their offer (unless they're trying to unload a load of crap) to get more $ for their stock.
got it... and the automated trading systems would be doing the same thing?
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