What exactly makes shares and stocks rise and fall?

Question

What exactly determines, for example, the percentage point drops and rises? Who or what gives those numbers?

Answer 1

Micky Mouse Motors is a (hypothetical) used car company chain. They have 10 million shares outstanding and a total asset value of $10 million. They also have a stockholder equity of $1 million. To some people, they will be thinking the value should be something upwards of $1 per share, others are thinking it should be something closer to 10 cents per share. Still others are interested in per share earnings, while still others are thinking that revenue growth is their determiner, and still another group is interested in the numbers of price to earnings compared to estimates of future growth.

There is no full agreement, but that is where the consensus of the moment in the market place comes in. I would expect the volume numbers to be something around 1 to 3 percent of shares traded each day. People have different ideas of valuation, different purposes for interest in the company, different schedules of market participation.

So the 10 cent people are vying for interest with the $1 people. So some are wanting to bid the price up, others are expecting it to fall. Each either watch for price changes, sometimes queuing orders, the cheap stock people placing orders for the stock at prices, say, below 50 cents a share. The lower the price, the more shares they are willing to buy. The expensive stock people are queuing orders for higher prices, when some come to their senses, so they have orders for prices over 50 cents. But for those prices, the cheap stock people are considering sell orders, thinking such prices are unsustainable.

At any given moment, there are orders to buy at some price close to the last sale price. There are also orders to sell. When the price matches, then a trade takes place--a seller gets to unload, a buyer gets to acquire. When that price is exhausted, then it depends on who is most interested in either selling or buying. Say the last price was 50 cents. Someone was willing to buy at 45 cents, someone else was willing to sell at 55. Unless some market specialist jumps in to compromise, there will be no trades 'until someone blinks'. Finally, someone decides they really want to unload their shares, so their order gets changed and they offer to sell at 52 cents. Someone else gets the idea, that if they up their offer to 47 maybe someone will take it. It comes back to who is more interested in moving. Just then there is a rumor, used cars are selling faster than new cars--suddenly the prospects for the company have grown. Now people are thinking "I better get it now before it goes up, hopefully a bunch!" So the orders for selling at 52 cents are snapped up, as well as the 55 cent orders, then, what is left? The price inches up.

Percentages are simply a number that reflects the change. Percentages are not the issue. What moves the decisions for opportunity to gain, or minimize losses. These are what change the price. Percentages are just another yard stick of what happened.

Answer 2

While folks may use words like "Blue Chip" and "Dow Jones Industrial Average", the fact is that how this all works is a lot simpler than people tend to believe.

First of all, stocks are sold by the share. So you buy shares of a particular company's stock. When a company's stock is being purchased, the price for those shares goes up. When a company's stock is being sold, the price per share goes down. The price will rise based upon how many shares are being purchased compared to how many are being sold off. It is the comparison of the ending price to the price when trading started that day which determines the percentage of increase or decrease.

So if a stock is selling at $100 per share at the start of the trading day, and ends the day at $105 per share, it's a 5% increase.

Answer 3

Generally, the percentage point rise and fall is determined by the ratio of how many stocks rose to how many dropped in value compared to the previous day. The numbers are reported by Dow Jones, NASDAQ, and other stock trading organizations.

Answer 4

There are designated "market makers" for each stock in the market. These market makers are stock analysts that watch the company closely and based on earnings and other pertinent factors about the company, they initiate the market value that you see on stock tickers. With smaller companies that are thinly traded, the job of the market maker is fairly simple. However, for larger companies with significant activity, this is a very busy job.

It is much more complicated than I've described and a broker could explain it in more detail.

Answer 5

1

Answer 6

company performance, investor expectation, market condition, government regulation. supply and demand of stock during trading hours

but bottom line is, good company=good stock

bad company=no thank you.

Answer 7

This is determined by demand and supply pattern
Computerised system of SEBI decides this automaticaly. no human hand in price decision.

Answer 8

Supply and Demand.

Answer 9

blue chip are based on economic factors

specs are based on gambling, with background reasoning if its a good bet or bad bet.