What make stock prices increase and decrease?

Answer 1

The "stock price" as reported by the media is really just the most recent price at which stock was exchanged. The up and down movement through the course of the day is based on basic supply and demand.

When stock is being traded, you aren't actually buying and selling at a given price. There is a "bid" price and an "ask" price. The bid is the highest amount someone is offering to buy the stock for and the ask is the lowest price someone is willing to sell for. These prices are often separated by at least a little bit. If I come into the market to buy stock A, I will have to purchase the stock at whatever the current "ask" price is. If I want more stock than the current "ask" price has available, then I have to move up to the next highest ask to continue buying.

This can be confusing, but here is an example:

I want to buy 1000 shares of Company A's stock. The current bid is $10 and the current ask is $11. Unfortunately for me, there are only 500 shares being offered at the current ask. The next seller is offering at $12. To fill your order of 1000 shares of "A", your broker would have to buy 500 at $11 and then 500 more at $12. After briefly showing a stock price of $11, the stock's new "price" would be $12.

You can see that if you wanted fewer shares or if someone was selling more shares at $11, the price wouldn't have gone up. Now, suppose someone really wants to sell all of their shares of "A", 100,000 shares. They could offer all of them at $11, but it might take a long time to sell them, or they might not sell at all. To bring buyers in, the seller might ask for $9. As soon as someone bought at $9, the stock price becomes $9.

Just like any other product, shares of stock are subject to supply and demand. If people want to buy more shares than people want to sell, those extra buyers will push the price up. If more shares are being sold than people want to buy, the stock will "go on sale" to encourage buying. That is the basic supply and demand of the market.

Answer 2

The short answer is supply and demand. Stocks will trade at a level when the number of shares of stock investors wish to purchase equals the number of shares investors wish to sell.

In theory the price of a stock should equal the discounted cash flows generated by the company over its lifetime (in plain English the company is worth however much money the company will pay out to investors adjusted to take into account that a dollar today is more valuable to an investor than a dollar earned ten years from now). If it becomes apparent that a stock is likely to generate more money over the long term than was previously thought (if for example the company raises estimates of how much money it will make next year) more people will want to own shares of the company and the price of the stock will rise until enough current holders of the stock can be convinced to sell. If bad news comes up, this process works in reverse, with investors trying to get out and the price falling until new investors can be tempted to buy in at cheaper prices.

Stocks also tend to fluctuate without any news, either at random, or because investors believe that they see a patern in the stock price.

Answer 3

The performance of the company. Generally, business report they're profit plans every quarter and then report they're success for each. Based off of this information investors either buy stock from that business or sell it assuming that the company will either fail to make it's goal or do better than the goal.

Also the more stock investors buy increases the value since there is less stock to purchase. Once this occurs the stock is then "split" which means that the company creates more stock for purchase and those who already had stock now have more since the stock they owned prior to the "split" multiplied during the split.

Hope this helps you.

Answer 4

Supply
Demand
Greed
Fear

Supply - If there are fre stocks and a lot of people buying, prices go up. If there is too much and not enough people, prices go down.

Demand - Similar...If a stock is suddenly popular and in demand, prices will rise.

Greed & Fear - News, rumours and gossip also causes a stock price to rise and fall. eg. a scandal, possible investigation of fraud, etc etc.

Answer 5

Its the simple case of supply n demand,if supply is less n demand is more stock prices go up n vice versa .

Answer 6

It is a random process that is influenced by many factors all of which are themselves somewhat random processes.

If you want to learn more you should pursue a university degree in economics with a focus on finance.

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Answer 7

Future earnings expectations in the long-run, greed and fear in the short-term, and market makers on an hour to hour basis.

Answer 8

Supply and Demand.

Answer 9

with all ans
lunar cycle & stars also make some affect

Answer 10

markets