[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 | | Home]

Please Respond

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: 14
Thread images: 2

File: lse.jpg (357KB, 1920x1080px) Image search: [iqdb] [SauceNao] [Google]
lse.jpg
357KB, 1920x1080px
What the fuck actually sets the price of a stock?

I know that it's to do with demand and supply, increased demand and a restriction of supply leads to a higher price but WHO THE FUCK IS SETTING THE PRICE?

I don't understand who sets the price. At least with a product from the supermarket I know who sets the price, it's the owner of the good but the owner of companies can't set the prices can they?

I know that when a company provides its IPO that it sets the price based on the market mood but afterwards WHO SETS THE PRICE?

Is the price set by the latest buyer? Someone explain please.
>>
>>1777657
>WHO THE FUCK IS SETTING THE PRICE?
short answer: the market.
long answer: the fucking market!

people bid for stuff and the average the offers and transactions go in a timeframe becomes the spot price.
>>
>>1777657
So whatever stock was for sale, and whatever price it was purchased for last, is the price you see quoted. Generally it's some large batch of stocks a large investor is selling though an algo. So it offers a few hundred/ thousand shares at any given time, whatever price a purchaser bought them for is the quoted price.

I know I said that twice, but that's all there is to it.
>>
>>1777657
>Is the price set by the latest buyer?
yes. The price is exactly what someone is willing to pay for it. The price that is shown for a particular stock is the price of the last trade that was made for a share of that stock.
>>
>>1777661
>>1777664
So what would happen if a share price was $100 and someone came along and bought up 1million shates at $1.

Would it drop to $1? Would there be a collapse?
>>
I have a question though, say there is a buy-out of a company you have stock in and the acquiring company offers a flat price for it thats somewhat above the current market price. Is this reflected in the ticker price or are your shares automatically sold by your broker or what?

Asking because like 3 stocks I hold are buy-out targets and one of them is going through a merger in the next couple months.
>>
>>1777669
Nobody would sell them shares for that price.
>>
>>1777680
I know but it's a hypothetical.

Could an ex-CEO do such a thing to fuck over a company?
>>
>>1777683
hypothetically we would see a weird jerk in spot.
but my guess is this is some weighted average so outliers only influence the price perception if they move a mountain of money.
>>
>>1777683
Probably and weird stuff happens with bear raids and the such, where multiple investors will conspire to borrow shares, then dump them on the market all at once for low prices, usually while having spread rumors or whatever, but the price would just immediately rebound once all the discounted shares were bought up in your example.
>>
>>1777683
Look into Carl Icahn, hostile takeover, and stock caps, share dilution etc.

People try this all the time and there are many ways companies can work to avoid getting fucked where it hurts.
>>
>>1777669
>>1777669
The fucking market

When a huge hedge or mutual fund sells a lot of a stock, you see the price drop, but then it rebounds within a few days unless they held a large percentage of the company
>>
File: 1486244087722.gif (2MB, 260x260px) Image search: [iqdb] [SauceNao] [Google]
1486244087722.gif
2MB, 260x260px
when an IP goes live on the stock market they set an asking price for the value of their stock which they say is based off potential, current assets, and other interesting valuations like current debt.

Say they think they need about 25 billion in capital, then they do the math and compute 15 dollars per stock initial offering. If number crunchers and investors accept this offer at neutral then that price is what will happen as everyone will buy in around that price. However, if the demand is high then the price will start moving up from 15 dollars as the amount of freely available shares goes down.

If people believe the stock is too high a price or valuation then no one will buy in and the price will start to fall until it reaches a point where people start to buy in.

There is a lot more to it but that is basically how it works.
>>
"the market" is as stupid as "the cloud"

There are computers and people involved. Everyone in the chain between you and the other participant you buy/sell from can fumble with your trade.

Providers playing against their own customers is nothing special and well known. If you want to understand it you need to look how it really works deep down instead of just trusting what your screen shows.
Thread posts: 14
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.