What is the mechanism by which a stock goes up or down by the second?
In: 7
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.
Latest Answers