Given that most people are price takers, who exactly determines stock prices?

Question

The common man and even institutional dealer/traders are price takers in the stock market: the common man might have to go thru a broker but at the end of the day they lift the offer on the order book after looking at the bid-ask prices.

Yes, we can park orders above/below the current bid-ask and wait for people to hit it but why would anyone want to buy above the current ask or sell below the current bid??

So what really move stock prices? The basic supply and demand model assumes that if at a price X we can't get any goods, we will try to get it at price X + 1 so the price rise in response to our demand. But in the stock market, i have only encountered price taking behaviour.

Any institutional boys want to enlighten me on who are the price makers in the stock market?

Answer 1

Usually lower and higher prices are offered in order to accelerate the rate of purchasing and to make a quick trade. If a stock is at $24, but I have a feeling it will be jump up to $30 tomorrow, I might want to offer $25 or $26 to encourage holders to sell right before closing. Likewise, if a stock is priced at $24 and holders expect it to dip to $20, I might offer $22 or $22.50 to encourage holders to sell right before closing.

The stock market is built off of anticipation and that's why prices fluctuate in the first place. Besides how corporations buy and sell their own stock at different prices to generate capital or protect wealth, traders buy and sell for the same reason too.
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[EDIT @ 5:19]
I should have mentioned earlier that usually it's massive and speculative traders who raise or lower a bid or ask price. People and companies who play the market for millions of shares will run a shortage in the market if they don't offer at an altered price (these are the guys who also are usually the cause of the price actually changing in the first place as well since the change the clearing price between supply and demand). Likewise, speculators will offer at a raised or lower price if they believe a massive player is going to buy or sell at a different price at a given time.

Answer 2

on the paying for and advertising floor of an replace that's desperate every time 2 investors determine to transact a inventory. Then that value gets pronounced and entered into the computing device. on the digital boards, same ingredient. every time 2 events comply with transact a inventory. In quiet markets you will see this for your self. working example, on occasion in commodities overdue at evening, you are able to set the value your self. only purchase a settlement from somebody who's offering to sell it at a cost you like. If there is no longer lots action occurring, you will see your value look because of the fact the "final transaction value" for that commodity.