[Boards: 3 / a / aco / adv / an / asp / b / bant / biz / c / can / cgl / ck / cm / co / cock / d / diy / e / fa / fap / fit / fitlit / g / gd / gif / h / hc / his / hm / hr / i / ic / int / jp / k / lgbt / lit / m / mlp / mlpol / mo / mtv / mu / n / news / o / out / outsoc / p / po / pol / qa / qst / r / r9k / s / s4s / sci / soc / sp / spa / t / tg / toy / trash / trv / tv / u / v / vg / vint / vip / vp / vr / w / wg / wsg / wsr / x / y ] [Search | Extra juicy! | Home]

>buy low, sell high If I'm buying, that must mean someone

This is a blue board which means that it's for everybody (Safe For Work content only). If you see any adult content, please report it.

Thread replies: 20
Thread images: 2

File: djia121815.png (25KB, 612x486px) Image search: [iqdb] [SauceNao] [Google]
djia121815.png
25KB, 612x486px
>buy low, sell high
If I'm buying, that must mean someone is selling. Similarly, if I'm selling that means someone else is buying. However, why would someone buy at high prices? If a stock is nearing its peak and it's a good idea to sell, to whom would I be selling to?
>>
>>1005283
Because "peak" isn't a known amount.

Maybe stock X moves to $80 per share, its highest valuation ever. At that point, investor A sells his share because he thinks it's the peak, but investor B buys in because he thinks it can get to over $100 per share in a few years.
>>
>>1005289
Yea motha fucka
>>
>>1005283
so if someone is selling there is always a buyer, even if the share is reaching record highs? What happens if nobody wants to buy? I assume this is what happens during stock market crashes, right? Conversely, what happens if no one wants to sell and everyone hoards their shares?
>>
>>1005297
no, there are not always a buyer for a seller, or a seller for a buyer. Stock price goes up because there aren't enough sellers for buyers at a given price. Stock price goes down because there aren't enough buyers for sellers at a given price.
>>
File: yellen.png (197KB, 548x305px) Image search: [iqdb] [SauceNao] [Google]
yellen.png
197KB, 548x305px
>>
>>1005341
You buyers aren't choosing the prices they want, unless the stock changes to whatever the most limit orders are.
>>
>>1005283
For one, this is what price movement is all about. If people are selling but no one wants to buy the price starts moving down. Basically, when you see peak, then a come down this us the result of exactally what you are talking about. There is always a buyer, the question is the price.

Also, traders often encourage us to think of trades as a zero sum game in which the winner takes money out of the losers theoretical pocket. While this is partially true, it is also completely possible for both parties to get exactally what they want. For example
>Gabe has been holding Appl since 2013 and despite the recent slip he has still doubled his investment just a couple years. He decides to take is 100% ROI while he can and call it a big win.

Meanwhile

>Jarrod is not such a long term investor, and he thinks that with appls recent slide from the 130s, and more recent slide from 115 makes it ripe for a quick buck. He is going to buy it now for 100 bucks and change because he thinks odds are good he will be able to offload it for a few percent roi in a fairly short period of time. While Gabe, the faggot from the previous example, buys and holds for long term returns, Jarrod is a more active trader who makes smaller, but much more frequent trades.

Both of these gay wads get what they want, and neither of them nessesarily lose. While Gabe perhaps loses some potential gains to Jarrod, he also surrenders risk as well. Having traders with different stratigies, time horizons, and risk tolerances makes for a market where their is pretty much always buyers and sellers that are not too far apart in price, save for when the shit hits the fan.
>>
>>1005297
I seen hundreds of wall street documentaries and I learned a thing, if there is no buyer some federal or some sort of agency at wall street is forced to buy the actions.
>>
>>1005410
So if we accept the premise that there is always a buyer, the question becomes, why is there always a buyer? Could there be cases in the stock market where absolutely nobody wants to buy a "toxic" share?
>>
>>1005449
In other words, I guess what I'm really asking is what happens when everybody sells? In the case of a stock market crash, everybody begins selling their shares. Who are the people buying them? Where do these mystery people come from?
>>
>>1005449
>why is their always a buyer
Becuse when their an in imbalance ( i.e. people selling but not buying) the price starts to drop. As the price drops generally buyers who were not intrested at the higher price might get intrested and buy. Or maybe not, then the price drops more.eventually the price gets low enough that buyers regain intrest in buying and boom, their is a buyer. Also,sometimes as price drops sellers lose intrest in selling and might pull their orders, which can slow the decline or even reverse it.

If no one wanted to buy at any price the stock would crash until it either got so cheap that the deal hunters couldn't resist or until it became so shitted up that it stopped trading and was worthless.

Because so many buyers are not mere mortals like us, but huge Markey makers with billions of dollars to fuck with, and because trading is so fast now, this whole dance plays out over pennies and fractions of pennies at the speed of light.

Further, algorithm trading and non market orders mean most throughly traded stocks are already in the crosshairs, and any dip in value is going to be seized.


So their is almost always a buyer because price decreasing motivates non buyers to become buyers.
>>
>>1005439
Nope
>>
>>1005468
Right. I fully understand the concept. Thanks for taking the time to help me gain a clearer understanding. The problem I am now having is with regards to stock market crashes. If everyone is panic selling, who are the people buying? I understand at some point, someone will buy because the price of the share is low enough to interest non-buyers in becoming buyers, but if EVERYONE in the market is selling, who the heck is buying?'

The reason I am asking is because I was reading about the stock market crash of 1929 and it occurred to me that if everyone was selling their shares, wouldn't that mean someone is buying all there shares up?
>>
>>1005485
If EVERYONE is selling, then no one is buying. That's basic math. However that does not and will never (NEVER) happen. There will always be geniuses or idiots that think now is the time to buy.
>>
>>1005510
so even in during the stock market crash of 1929 when everyone was selling, there were some buyers?
>>
>>1005587
The people who bought for pennies on the dollar made a fortune.
>>
>>1005587
There will always be buyers if the price is low enough.
>>
>>1005587
That's how prices work.

>1000 people want to buy bitcoins at $500 each
>Sorry this is too low, the sellers are only selling for $600 each
>Price rises

>1000 people want to sell bitcoins at $1000 each
>Sorry this is too high, nobody wishes to pay so much and they are only willing to buy for $600 each
>The price falls
>>
>>1005456
the company right?
Thread posts: 20
Thread images: 2


[Boards: 3 / a / aco / adv / an / asp / b / bant / biz / c / can / cgl / ck / cm / co / cock / d / diy / e / fa / fap / fit / fitlit / g / gd / gif / h / hc / his / hm / hr / i / ic / int / jp / k / lgbt / lit / m / mlp / mlpol / mo / mtv / mu / n / news / o / out / outsoc / p / po / pol / qa / qst / r / r9k / s / s4s / sci / soc / sp / spa / t / tg / toy / trash / trv / tv / u / v / vg / vint / vip / vp / vr / w / wg / wsg / wsr / x / y] [Search | Top | Home]
Please support this website by donating Bitcoins to 16mKtbZiwW52BLkibtCr8jUg2KVUMTxVQ5
If a post contains copyrighted or illegal content, please click on that post's [Report] button and fill out a post removal request
All trademarks and copyrights on this page are owned by their respective parties. Images uploaded are the responsibility of the Poster. Comments are owned by the Poster.
This is a 4chan archive - all of the content originated from that site. This means that 4Archive shows an archive of their content. If you need information for a Poster - contact them.