Hi guys, how is everyone ? hope yall had a good trading day ... i was thinking about this and i was very confused ... i often hear people talk about buyers and sellers ... and i get how that works but what i dont understand is how can there be a seller without a buyer in the stock market ? ... i mean everytime there is a sale there has to be a seller and a buyer ... so what do they mean when they say ... more sales cause prices to drop ? Please help me figure this out ! Thanks , tj !
Lee Shepherd
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Hi tanveer,
Its simply Supply and demand. If I have 5 spoons up for sale for £10 each and some one wants to buy them from me the price remains at 10. If no one wants them at 10 I have to keep dropping the price until someone takes them off my hands, thus the price goes down. If however 7 people want my spoons then I can rise the price until they are sold at a suitable price I am happy with (ie, 2 peolpe drop out and the other 5 are willing to pay the price), hence holding a contract until I get a price that I want. I also have to be aware of all the other spoon (market makers) sellers out there.
Of course, in real time all we (little) traders see is buying and selling. If you are buying and selling big (market dependant and time+volume) you will move the market and more likely than not, not get all the contracts filled at the desired price so the order would be staggered to get best price, hence, the markets go up and down.
Its simply Supply and demand. If I have 5 spoons up for sale for £10 each and some one wants to buy them from me the price remains at 10. If no one wants them at 10 I have to keep dropping the price until someone takes them off my hands, thus the price goes down. If however 7 people want my spoons then I can rise the price until they are sold at a suitable price I am happy with (ie, 2 peolpe drop out and the other 5 are willing to pay the price), hence holding a contract until I get a price that I want. I also have to be aware of all the other spoon (market makers) sellers out there.
Of course, in real time all we (little) traders see is buying and selling. If you are buying and selling big (market dependant and time+volume) you will move the market and more likely than not, not get all the contracts filled at the desired price so the order would be staggered to get best price, hence, the markets go up and down.
Rhody Trader
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While it's true that by definition there must be a buyer for ever seller (long for every short), who those participants are makes a difference. For example, if it's stock investors on both sides of a trade, that's very different than if it's an investor on one side and a market maker on the other, or an investor on one side and a short-term trader on the other.
In many ways it comes down to whether you're talking about two owners trading with each other. That's just a transfer of assets. If, however, it's a long and a short that are the counterparts there's an outstanding liability which remains with the short needing to eventually buy the shares back.
In many ways it comes down to whether you're talking about two owners trading with each other. That's just a transfer of assets. If, however, it's a long and a short that are the counterparts there's an outstanding liability which remains with the short needing to eventually buy the shares back.
rathcoole_exile
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Lee keeps selling different ones, claims they are all the "genuine one" that was in his mouth when he was born ...... even provides forged certificates for the counterfeits.
he's got a nice little business going. I think spanish was his financial backer and wrote his business plan ....
he's got a nice little business going. I think spanish was his financial backer and wrote his business plan ....
UKtradergirl
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i like crude oil spoons- made a killing out of them lately. Gold ones look nicer in the house though.
foredog
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doesn't the oil mix in with the food...oily conflakes...yuk!
