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02-17-2013, 11:15 AM
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Location: On The Road Full Time RVing
2,341 posts, read 3,355,942 times
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What is it that makes Stocks go up, and down, ... really ?
How, When, Where, and Why ?
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02-17-2013, 11:23 AM
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99,411 posts, read 98,894,667 times
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simply it is an auction on a few different exchanges where you can buy ownership in companies by bidding on them .
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02-17-2013, 11:43 AM
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Location: On The Road Full Time RVing
2,341 posts, read 3,355,942 times
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Quote:
Originally Posted by mathjak107
simply it is an auction on a few different exchanges where you can buy ownership in companies by bidding on them .
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Ok but what causes the price of a stock to go up or down ?
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02-17-2013, 11:50 AM
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99,411 posts, read 98,894,667 times
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greed ,fear, perception of what a company is worth every minute of the day changes the amount people offer on the stock exchange.
lets suppose you have a business and you want partners so you are selling shares,.
well today the economic news looks dismal. you may want 5000 a share. i offer to 4000.00 . you accept so we make a deal.
tomorrow you find out you were awarded a big contract worth 1 million bucks. today you want 6000 a share. well 5 of us want to be your partner now but you only want one partner so i go i will give you 6500.00 .
the other guy goes 7000. you take it.
it is a give and take . it is way to complex to explain in a post but if you google it i am sure you will find very good explanations.
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02-17-2013, 05:04 PM
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Location: The Woodlands
805 posts, read 1,749,016 times
Reputation: 1077
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Quote:
Originally Posted by bumpus7
What is it that makes Stocks go up, and down, ... really ?
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Does it really matter why? |
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02-17-2013, 07:50 PM
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Location: Sunnyvale, CA
6,288 posts, read 11,233,593 times
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Quote:
Originally Posted by bumpus7
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What is it that makes Stocks go up, and down, ... really ?
How, When, Where, and Why ?
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To understand how markets work, read some books like
Liar's Poker
West of Wall Street
There's different reasons and it depends on the time frame you're looking at. Long term moves tend to have economic causes. Medium term moves sometimes are due to crowd mentality, at other times can be stock manipulation by insiders or recommendations/advertising/hype. Short term volatility can have lots of causes, including news and economic reports, floor trader manipulation, big players (commercials, big funds) getting into and out of markets with large orders, and so on.
The most base "reason" why a price goes up or down is due to the dynamics between the bidders and the sellers at any given time. If you've got a bunch of people bidding up a stock, then the sellers are going to move their prices higher. If you've got nobody wanting to buy a stock, sellers have to lower their prices.
Quote:
Originally Posted by Cranston
Does it really matter why?
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Depends on how deeply you're getting into it. Can certainly be useful knowing the dynamics of the stuff if you're making a profession of investing or trading. |
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02-17-2013, 08:25 PM
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Location: US
24,175 posts, read 24,933,538 times
Reputation: 19369
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Quote:
Originally Posted by bumpus7
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What is it that makes Stocks go up, and down, ... really ?
How, When, Where, and Why ?
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If there are more people wanting to buy a stock than sell, the stock will go up. If there are more people wanting to sell a stock than buy, the stock will go down. |
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02-17-2013, 09:40 PM
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Location: The Woodlands
805 posts, read 1,749,016 times
Reputation: 1077
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Quote:
Originally Posted by bmw335xi
If there are more people wanting to buy a stock than sell, the stock will go up.
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hmmmm, then explain how at the end of each day, there will have been an equal number of shares sold as brought. |
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02-17-2013, 09:55 PM
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Location: US
24,175 posts, read 24,933,538 times
Reputation: 19369
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Quote:
Originally Posted by Cranston
hmmmm, then explain how at the end of each day, there will have been an equal number of shares sold as brought.
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If there are more sellers than buyers, the price will go down because not enough people are willing to buy the stock at that price. If there are more buyers than sellers, the price will go up because not enough people are willing to sell the stock at that price.
If 100 people want to buy XYZ and only 50 people want to sell XYZ at $50/share, what will happen? Some buyers will have to pay more than the current price, until more people are willing to sell.
Anytime you buy a stock, you need a seller. That is why you have a BID and ASK price. If it's a highly traded stock, the BID and ASK price will be almost the same as the current price. If it's a low volume stock, you may need to pay a premium to find a seller.
Does that make sense to you? |
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02-17-2013, 10:57 PM
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Location: The Woodlands
805 posts, read 1,749,016 times
Reputation: 1077
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Quote:
Originally Posted by bmw335xi
If there are more sellers than buyers, the price will go down because not enough people are willing to buy the stock at that price.............anytime you buy a stock you need a seller
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Your comments seem to be in contradiction. |
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