eli5 How is the ticker price of a stock decided when there are multiple trades of a stock happening at the same time?
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At any given time there are multiple bids to buy a certain number of stocks at a given price as well as multiple offers to sell various amount of stocks at certain prices. The orders are filled until there are no more matching prices, many orders do not get filled. The ticker price for the stock is just what the price is between the lowest offer and the highest bidder.
For high volume stocks this difference is usually very small and there is a large amount of stocks available to exchange, but for low volume sometimes the spread can be quite large with a very small amount available for each bid/offer so someone making a large market order (as in buy x amount at whatever available price) they may end up buying significantly above or selling significantly below what the ticker price was at.
A lot of these bids and offers can sit around for weeks or months. If there is suddenly a massive and unexpected increase in the amount of volume of trades they may “halt” a stock for a few minutes to sort out all the trades to make sure they’re done properly and in order before resuming. During which the ticker would also be paused and wouldn’t update until they resume trade.
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