What is the mechanism by which a stock goes up or down by the second?

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What is the mechanism by which a stock goes up or down by the second?

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Anonymous 0 Comments

stocks are traded every second. there are thousands of people trading them, and some bots too. They submit a bunch of bids, then exchange’s algorithm matches them up and determines the price.

in fact, it happens several times per second. I remember hearing that traders based in Chicago complained that they get 0.2s lag compared to traders based in New York.

Anonymous 0 Comments

The market price isn’t controlled by any central factor. The “price” you see rising and falling every second is a reflection of what the stock was bought and sold at most recently

Anonymous 0 Comments

If you want to buy a stock, you create a buy order on the exchange that stock is traded at. You can set it above or below the ticker price. A seller comes by and decides whether or not they want to take your offer. If they take it, the ticker price will adjust to represent that the stock was just traded at some price, at above or below the previous price. Same thing if you want to sell a stock. You create a sell order at some price you decide and if a buyer is interested, they will pay that price.

Market forces will dictate if it goes up or down. If more buyers are on the market, the price will go up as buyers can only find offers above the ticker price since the lower ones were already sold to other buyers. If more sellers are in the market, the price goes down as sellers can’t sell if their prices are too high. Robin hood and other consumer trading platforms do this on your behalf and in large orders with others buying/selling at the same time, and clearing a transaction (the buyer and seller exchanging the stocks/money) can take days.

Anonymous 0 Comments

A stock’s price is the most recent sale price (except on rare occasion). The price will change with either each sale or with each update (each second, each partial second, etc.).

Anonymous 0 Comments

It’s literally a market. A guy says, I’ll sell my acme stock for 50 bucks a share, and I have 100 shares. Another guy says I’d like to buy 200 shares of lemonade stock, and I’ll pay up 10 bucks a share.

When a buyer and seller match, the stock sells, and that’s now the current value of that stock (slightly more complex… But eli5).

If the guy selling acme me really wants to sell, he lowers the price. If tons of people are trying to buy it, he can raise the price. If the guy didn’t really want to sell… But he sees people are offering way more money for it… He may decide to sell at the higher price.