How or why do stock prices change and who changes them? Is it an automated system that raises prices if people keep buying and vice versa?




In: Economics

The price quoted is the last price trades took place at.

At any given time, there will generally be plenty of investors willing to buy shares at lower prices, and sell shares at higher prices than that last trade price. If someone decides they want to immediately buy or sell more shares than others are willing to trade at that price, the order will fill at the next best available price, and the quoted last price will reflect that trade.


The “price” or the stock is the last amount of money that was paid by a buyer to a seller for that stock. The next time it will sell for whatever current selling offer the next buyer is willing to meet. If there are 5 people willing to sell 1 share @ 5€ and 1 person willing to sell 1 share @ 4.99€, then a person looking to buy a share at the cheapest will put the new share price at 4.99€ because they will be matched with that particular offer.

People who are selling stock put out “asking prices”, letting potential buyers know what they are willing to accept. Some people may ask $100, for example, and other people may ask $101, and others may ask $102.

Then the buyers put out “bidding prices”, letting sellers know what they are willing to pay. Some people may bid $97, some may bid $98, some $99.

Whenever a buyer and seller agree on a price, the sale is automatically completed and whatever price they agreed on is the new official stock price. And there are hundreds of trades happening every minute between different people agreeing to different prices, and that’s why the price jumps around so much.

Think of stocks as candy. The stock market is a candy store. People with candy to sell and people who want to buy candy both go to the candy store. There are price lists on the wall, but the prices are negotiable.

Let’s say you you want to buy chewing gum. Inside the candy store, you find someone with exactly the chewing gum you like. If you are all alone in the store that day, the seller might agree to lower the price. This lower price then becomes the new price.

If there are lots of people wanting to buy the exact same candy as you, maybe someone will offer to pay more. This highet price is now the new price, at least until it slows down again.

Remember, only rich people are allowed into the candy store, people with money and people with candy to sell. Most people don’t have money or candy to sell. That’s because we have decided they don’t deserve it. Knowing not everyone gets to have candy makes it taste better.

to answer your question money is an illusion capitalists have devised to make people into money. they (banks, hedgefunds, whales)trade at massive billion dollar prices to one another in an infinite cycle (buying selling trading options) profiting off of the companies,the business and assets that make up the value of the stock ie materials employees labor and time.

time(theta) is a part of the equation for the stock market, which you can absolutely join at anytime with whatever change you can scrounge up on a debit card. true you will be making pennies for a time but eventually you will grasp the basics and the concept of supply and demand. or not. really that depends on you.

as for your last question, there is a system in place monitored by several different websites(ortex,fintel,checkout dd on r/amcstock ) and the numbers you see are input by the various brokers (cashapp, webull, fidelity, robinshithood) and the millions of people’s (and aforementioned bigwig capitalists) investments piling up and that all builds up and moves like the tide creating the line graph. or graphs. it’s all quite over my head but I know for a fact it’s full of fraud and criminal activity. fun stuff.

it’s a continuous (sort of) auction for every stock there is a ticker which is just a name under the ticker people can place orders to buy or sell that stock.

if you want to buy you place a “bid” order

if you want to sell you place a “ask” order

the platforms I’m aware of list only the highest “bid” and the lowest “ask” for stock. as well as the volume of each (how much they want to buy or sell)

the highest bid is the price that you can sell at immediately

the lowest ask is the price you can buy immediately

those are the real “prices” of the stock at any given moment they change based on weather someone wants to buy or sell there could be lots of reasons for either.

because that’s just a little complicated that’s not what gets reported on as the “price” of the stock. instead they list the price of the last transaction that took place which may or may not represent the current bids or asks.