Why do stock prices change dramatically in value within seconds after release of financial results? After all, it is impossible to analyze such a large amount of information in such a short time.
In: Economics
In very simple terms there are a lot of people with their “finger on the trigger” so to speak. In reality these moves are mostly automated but everyone expects news and announcements to cause large price movements and the bulk of investors like to stay ahead of them, so they’re absolutely watching and reacting to news, with either fully automated systems taking care of it or predetermined actions that can be triggered at the push of a button of an investor watching the announcement. What’s even crazier is that these moves often happen after market hours, where the low liquidity helps exaggerate the movements.
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