How or why do stock prices change and who changes them? Is it an automated system that raises prices if people keep buying and vice versa?
In: Economics
People who are selling stock put out “asking prices”, letting potential buyers know what they are willing to accept. Some people may ask $100, for example, and other people may ask $101, and others may ask $102.
Then the buyers put out “bidding prices”, letting sellers know what they are willing to pay. Some people may bid $97, some may bid $98, some $99.
Whenever a buyer and seller agree on a price, the sale is automatically completed and whatever price they agreed on is the new official stock price. And there are hundreds of trades happening every minute between different people agreeing to different prices, and that’s why the price jumps around so much.
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