If I understand it correctly, the way to cause price changes in a stock is by matching buyers and sellers who quoted the same price.
But If all investors would place only market orders the price of a stock will basically remain constant as the stock changes hands, correct?
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I don't think so. There are spreads applied by market makers, so if there are more sell orders prices would likely move lower and if more buy orders prices would move higher - as it happens indeed.
The way a stock price changes is if someone lifts an offer or hits a bid.
Gross over-simplification: Assume the last trade was 50.46 and the market is 50.45 at 50.47 now. If you want to buy, you’re paying 50.47 and the price ticks higher. And the bc market bid/ask may go to 50.46 @ 50.48. You want to buy more, you’re now paying 50.48 and the stock ticked up again.
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