It fluctuates daily, what causes this??
2006-11-22 03:51:18 · 7 answers · asked by David 3 in Business & Finance ➔ Investing
The basics of it are quite simple.
Just like anything else in life, it is supply and demand. When a stock is in demand, the seller can command a higher price and the price raises.
When no one wants to buy the stock, a seller has to sell it at a lower price and the price of the stock goes down.
Obviously, this happenes on a much larger scale with potentially millions of shares of stock trading in a day.
However, in reality, Wall Street is sometimes quite irrational. Buyers and sellers tend to act like a bunch of grade school kids chasing the latest "fad". A stock will fall out of favor for seemingly the stupidest reason and everyone sells it, thus the price goes down. Conversely, a company will do nothing special and the stock will skyrocket.
So in conclusion, supply and demand drive the market. What changes the supply and demand for a particular company can be either rational or irrational.
2006-11-22 03:59:48 · answer #1 · answered by Slider728 6 · 0⤊ 0⤋
Basically, in the Stock market everything about price is dictated by supply and demand. If alot people want a stock they will place a BID price on the stock, if nobody is willing to sell there shares at that price the price will continue to raise until it gets to a price were somebody is will to sell. On the other hand if people not longer want a stock they place an ASK price, on the market. Which is the price they are willing to sell at. If nobody wants the stock at that price, the seller only has the option of lowering his price until there are buyers. Hence the price goes down. This is what determines how the price raises and falls. What causes people to decide to buy/sell a stock is a completely different issue.
2016-05-22 15:10:11 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Stock market fluctuations are caused by the collective perceptions of investors, which in turn are caused by news developments (not entirely financial news), recommendations of so-called financial experts, and, by no means least, by emotional factors which (rationally) should have no bearing on share prices. As you imply, there is no sound reason why a stock should be valued at two dollars a share (or whatever) more or less today than it was yesterday - barring any international, national or business news of consequence - but it happens all the time. Perceptions count as much as factual information (if not more), and an understanding of their effect can be of great value to an investor.
2006-11-22 06:46:05 · answer #3 · answered by jerrold 3 · 0⤊ 0⤋
I have been playing with stocks a bit and realize its a very emotional past time. You worry if a company has a problem then sell too soon.. or a company makes a discovery and buy too late. The fluctuating is all about how many shares are sold that day against how many shares were bought that day. At least as near I can figure it out.. its complicated!
2006-11-22 03:55:35 · answer #4 · answered by Tapestry6 7 · 0⤊ 0⤋
Random chance.
The book A Random Walk Down Wall Street by Malkiel is very good at explaining the irrationality of the day to day movements of stock prices. Over the long term it is perception (fear of loss, greed for acquisition) that drive supply & demand.
;-)
2006-11-22 04:59:38 · answer #5 · answered by WikiJo 6 · 0⤊ 0⤋
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http://www.best-stock-trading-systems.com/stock_market_for_dummies.html
2006-11-22 19:10:26 · answer #6 · answered by Anonymous · 0⤊ 0⤋
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2006-11-22 04:09:53 · answer #7 · answered by yummy _ 3 · 0⤊ 0⤋