What actually controls stock prices?

[Mr Sept]

I am all for HFT, as they add vast amounts of liquidity to the market place.

 

[darktone]

Do the companies control the prices at which their stocks sell, raising the price as more stocks are sold? Or does the price automatically rise as more are bought, and then go down when they are sold? Or doesn't the number of sales have anything to do with it? Or...???

Also, can you always buy and sell stock when you want to? I had been of the opinion that you could just buy and sell whenever you want, or maybe whenever the market is open. But someone mentioned something about one of the dangers of penny stocks being that you can't always get rid of them when you want to. So can you not always buy and sell when you want? And if not, what places the restrictions?

Thank you for any help understanding these things!
David

Its all about inventory. Apparently :smart:

 

[darktone]

What is a dark pool?

Darkpool explained

 

[timsk]

How about if you use an automated system? I've heard of that...is that faster?

Hi David,
I don't have a simple and comprehensive answer to this question I'm afraid. Yes, potentially, an automated system could get around the problems of entering and exiting at the price you want, but it's dependant on many different factors. For example, the market and instrument(s) you trade, choice of financial vehicle and, as dbphoenix pointed out earlier in the thread, your selection of order type. Generally though, I think it's fair to say that those who use algorithms to trade automatically do so because the algos are more efficient - and certainly faster - than a trader opening and closing positions manually. But that's a whole different ballgame with it's own characteristics and problems. If you want to read more on the pros and cons of trading manually or mechanically, check out this FAQ: What’s the Difference Between a Discretionary Strategy & a Mechanical System?
Tim.

 

[mike.]

Darkpool explained

You never fail to amuse....

 

[ph_trader]

hahahaha I needed that darkpool ice breaker.. cracked me big time.