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Paul E
Lv 5
Paul E asked in Business & FinanceInvesting · 8 years ago

what makes stock prices move?

i understand that price move up and down. but what is it that makes the prices move

Update:

So if there are times of More buyers or Sellers, can you place a buy and not get your order.

and i've heard of supply and demand, but who decides the price each minute, does an agency do it. or government

9 Answers

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  • Anonymous
    8 years ago
    Favourite answer

    Stock price fluctuate depending on many factors.

    1. Supply and demand. if the supply is low, demand is high, price is high and vis versa supply high, demand low, price low.

    2. Investments. If many people are putting money into a stock, the price of what the stock will raise thus making more people invest until it eventual hits a high and then levels and then returns to the market equilibrium or lower.

    3. Interest rates. if rates are high, most people buying using loans wouldn't invest much money because they'll have to pay back more interest to whom ever they borrowed the loan from.

    4. Foreigners. foreign investment is huge in the stock market because we are a open trade market. foreigners tend to place money in stocks here that are cheaper than in their own country.

    There are many ways for the prices to move in the stock market and it is important to know economics if you want to start investing. my suggestion to you is, if you're asking because you want to get involved in the stock market, is to at least Google economics and get a good grasp on the basics and than move on to learn each part of it, the macro and micro. You can even apply to take a class at a college if you really want to get this down. its important to really apply yourself to understanding economics before investing, and its pretty easy to understand once you grasp the main concepts in each part. eventually, through enough learning and study, you can live off of playing the market like my friend who sits at home everyday, all day, and does nothing but manage his money in his stocks.

    Source(s): I'm taking college level courses in high school studying this and I scored a 4 on the test. its fairly easy to understand once you learn how the basics work.
  • ?
    Lv 7
    8 years ago

    Buyers out weighing sellers and vice versa (supply & demand).

    Additional:

    It depends on the liquidity of the stock. If it is a large cap. then you must understand there are many different types of investor, trader, investor, institution of all different sizes (from 1 share to several million shares) and will be very liquid (easy to either buy or sell).

    Next point, who decides? It may be helpful to learn how an order-driven market works. It works on buyers and sellers putting orders into the market and a big computer matching the matchable bargains and calculateing the current price of those that cannot yet be matched (in real time).

    The buy & sell trades that cannot be matched constitute the order book. As orders are added to the order book more orders will be matched and become trades. The best bid order and the cheapest ask order give you the current stock price. However this does not stand still: orders are constantly being added at different prices. If you watch an order book live you will see the price/prices darting up and down constantly. In the video below the screen has been frozen making it easier to follow.

  • 8 years ago

    Supply and demand. The price is determined by the last agreement between a buyer and a seller. If I buy a car right now.... the dealer and I may struggle with a price that works for both of us. Once we both agree to a price...... that's the value of the car, until another dealer and buyer come to an agreement.

    If the dealer has plenty of buyers... they may not lower the price... because at the end of the day... they'll still sell the car. If the car is a lemon... and you're the only one in a month that's even asked about the car.... they may reduce the price significantly.

    An agency or government has nothing to do with this. The battle is between buyer and seller.

    If you put in a limit buy at $10 and no seller will sell it less than $10.50.... you won't get the stock.

  • Anonymous
    8 years ago

    Stock prices change every day as a result of market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.

  • 8 years ago

    People move the stock price. Next, the stock price move people. In stock market, there is no such thing as supply and demand. As long as the 'price is right', people won't go into or move away from it.

  • Anonymous
    6 years ago

    the best trading software http://tradingsolution.info/

    i have attended a lot of seminars, read counless books on forex trading and it all cost me thousands of dollars. the worst thing was i blew up my first account. after that i opened another account and the same thing happened again. i started to wonder why i couldn,t make any money in forex trading. at first i thought i knew everything about trading. finally i found that the main problem i have was i did not have the right mental in trading. as we know that psychology has great impact on our trading result. apart from psychology issue, there is another problem that we have to address. they are money management, market analysis, and entry/exit rules. to me money management is important in trading. i opened another account and start to trade profitably after i learnt from my past mistake. i don't trade emotionally anymore.

    if you are serious about trading you need to address your weakness and try to fix it. no forex guru can make you Professional trader unless you want to learn from your mistake.

  • 8 years ago

    If you truly want to know more about how the stock market works and how the professionals are manipulating it, read anything from Richard Wyckoff or Tom Williams it will open up your eyes.

  • 8 years ago

    Supply and demand.

  • 8 years ago

    dividend, firm incremental earning, incremental profit of firm, mainly present value of firm which is determine firms future cash inflows.

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