eli5 why does stock value drop when stock is sold?

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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

11 Answers

Anonymous 0 Comments

It doesn’t necessarily drop when sold. Stocks are bought and sold all the time while maintaining stable prices. It drops when a lot of people sell at once.

When you have more sellers than buyers, the price gets driven down because if you want your stock sold, you need a lower price than the other guys. It’s the opposite of when there are more buyers than sellers, which drives prices up.

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