Eli5: when somebody dumps a million dollars into a stock why does the price not temporarily skyrocket?

733 views

Title!

In: Economics

4 Answers

Anonymous 0 Comments

It’s possible that it could, depending on how the order is placed, how large the company is, and how actively it’s being traded.

But, you would be pretty foolish to place an order that large as a market order (“buy at whatever price the market will bear”) versus a limit order (“I’ll buy these at this specific price”). For most publicly traded stocks, a million dollars isn’t very significant.

You are viewing 1 out of 4 answers, click here to view all answers.