I thought that once it was the market is closed no further transactions could be done. also, Which number do they use to calculate your earnings? I’m very new to investing, so please are gentle in your replies.
2007-01-09 08:10:13 · 8 answers · asked by Anonymous in Business & Finance ➔ Investing
Dear........the stock market and stocks are different from simple accounting...where opening balance is always equal to closing balance. Stocks open at different rates than there closing rates because the next day people/buyers/sellers are willing to pay less or more depending on various factors like News/views/rumours/market performance/floating stock/total buy or sell orders etc.....the list is longggggggg.
Hope this is a satisfying answer.
2007-01-09 08:22:35 · answer #1 · answered by ash.G 1 · 0⤊ 0⤋
Supply and demand. The next morning (for some reason) things have changed.
The value of a stock is based on the number of buyers and sellers and what they're willing to do to buy or sell the stock. Those reasons or numbers can change by the next day for countless reasons.
If the buyers are only willing to pay less for a stock the next day & a seller sells.... Then the price has droped.
The 2nd part of your question is a little unclear. But..... after selling a stock your appreciation or depreciation is based on your total cost to buy the stock less the total cost to sell (including commisions).
2007-01-09 16:56:03 · answer #2 · answered by Common Sense 7 · 1⤊ 0⤋
It has to do with market efficiency, which basically means the market will adjust according to news or any new development. For instance, if it close at X, and the company then announces a buyback, the stock would probably open higher as they'll be greater demand for the stock. See http://ibooyah.com for investment ideas.
2007-01-09 16:32:29 · answer #3 · answered by Anonymous · 1⤊ 0⤋
Some stocks can trade after hours and would cause the opening price the next day to be different from the previous close. I'm not sure what you mean by "earnings" but if you are referring to "capital gains" you would use the sale price.
2007-01-09 16:30:54 · answer #4 · answered by babalouee 2 · 1⤊ 0⤋
Things happen to the economy and individual companies between closing and opening. These affect the value of the company's stock.
2007-01-09 16:13:50 · answer #5 · answered by Phoenix, Wise Guru 7 · 0⤊ 0⤋
Some companies trade on several countries.
New York, Tokyo, London.
Almost 24/7
The market is closed in the United States of America and you go to bed but in London they are trading.
2007-01-10 03:24:49 · answer #6 · answered by Anonymous · 0⤊ 2⤋
over night trading......markets only open for a short, but in reality its 24/7
2007-01-09 16:18:24 · answer #7 · answered by bama_cid 3 · 1⤊ 0⤋
I suggest your read the book "Understanding Wall Street". Great book for beginners.
2007-01-09 16:43:29 · answer #8 · answered by Anonymous · 1⤊ 0⤋