if someone else has to buy your stock when you sell it, isn’t stock being bought at the same time as it being sold?
In: Economics
Good observation! The reason this happens is because it doesn’t work like you think, where two people kind of “find each other” in the market and transact with each other.
Instead, people are constantly submitting *buy orders and sell orders*. Each order has a price that they’re willing to take or give.
When people sell, they take the highest buy order that they’re willing to accept. As more buy orders get filled, the highest buy order goes down until it balances out. We call that point the stock’s price!
If you want to see this in action, look up financial “depth charts”. They can show you buy and sell orders in real time. You’ll see that the asset’s “price” is the point at which the buy and sell orders meet!
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