When I am buy stock at a lower price point than it was trading a 1 day or week, month or year later, does it mean that somebody during that same time frame is losing the difference?
In: Economics
If you buy a share at 5$.
Then the price on the market of the share goes up to 6$ and you decide to sell it.
You made 1$ and the person buying hasn’t lost money.
However, he would lose if the price goes down and he decides to take the loss.
But this proves that you can make money in the market without someone losing.
I grow a lemon
I sell it to you for $2
Something happens to the lemon market and prices increase as well as citrus demand.
You sell the lemon for $5
We both made a profit here with no loss.
Growing the lemon is an IPO for simplicity sake.
Whoever buys the share off you ‘loses’ the money, the same as any transaction.
If a wholesaler buys 1000 apples off a farmer for 1 dollar each then later sells them for 2 dollar each would you say the farmer lost 1000 dollars? Would you say each customer lost money per apple?
Person A buys one stock at it’s initial sale for $10. 1 year later the company is doing well and it’s worth $20 so Person A decides to sell their one share.
At the same time you decide you want to buy stock in that company because they’re doing well. You buy Person A’s share at $20. Person A made $10 from this sale.
The company has a moderate year and is up to $22 but you decide you want out. You list it for sale and Person B decides they want in, and buys your share. You made $2.
So far the stock has been sold two times and both sellers have made money.
Latest Answers