Why when there are more buy trades than sell trades does a stock price go down?

Question

I have shares in NSAM.L. Over the last week buy trades have outnumbered sell trades 5 to 1 but the share price continues to go down.

As an example today there were 1.1m shares traded of which 800k were buys and the remainder sells. Price shown 9.75p

This is for NSAM.L. As its traded on the LSE the buys and sells don't have to match because of the market maker system.

Sorry, shown above should read down!

Answer 1

When things get slow, the market maker is merely searching for volume.

When prices are moving up, people are afraid of missing out on big move, and are jumping in big time. But when prices are going down, not many people fear that prices are going very far, so the decline doesn't attract new selling. But the market maker hasn't found volume yet, so he just keeps bidding it down.

I think this says more about a mindset (maybe about the market more than this stock), than anything else. The bull market has been confirmed to some with new all-time highs in the Dow. Most people feel comfortable with holding the stock, and traders are not trading the downside.

Answer 2

First off, the buy and sell should match, but I think I know what you're saying.

The way the stock goes is based on supply and demand. Each buy trade could have been for the same or around the same price and sellers might be willing to sell it at that price, but then a BIG sell order comes in and buyers don't want to pay that price anymore since there's more being sold than people want, driving down the price.

So even though you might have 10 buy trades at 100 shares each. One sell trade at 500 shares could push it down.

Hope that helps!

Answer 3

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Answer 4

Totally depends how many are being sold, how many are being bought and when. If your stock is being sold by the thousands at $10 and it continues to drop during the day, you may have buyers that are buying it on the slide in smaller round lots in hopes it may rebound and/or believe it will upswing. Sell 10000 and buy 500 isn't going to bring your stock to its 52 week high...ever...

Not to mention...who is selling and who is buying? If the smart money is BUYING, they aren't going to buy 10, 20 or 50 shares. It might possibly be the smart money doing all the selling...in which you need to get the hell out!

Answer 5

Could it be that the sellers are selling by the thousand but the buyers are buying by the hundred (for example). There are more sell trades but less shares sold than bought, hence more demand and the price goes up?

Answer 6

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Answer 7

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Answer 8

Perhaps the business has been underperforming, and the people who are buying know of a takeover bid that will rocket the prices up as confidence grows?

If the price is falling and people are buying, somethings going on.

Perhaps they know something you don't? Ask your broker.

Answer 9

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