How do stocks rise/fall?

Question

just wondering....who controls how much it rises or falls? is it all figured out by a computer, or is there a formula for it?

Answer 1

The overall concept is based on the theory that for every buyer there is a seller and the bid/ask prices are what determines the price.

It isn't really true to the letter however as there are such things as Market Makers / Trade Specialists that aid in the flow of the markets and provide liquidity.

Answer 2

Stocks go up and down based on supply and demand just like everything else.  When the supply of stocks (sellers) is greater than the demand for stocks (buyers) the price falls and vice versa.

Answer 3

Supply and ddemand, the more people buy it the price goes up, the more people sell it, the price goes down.

Answer 4

The stock markets are one big auction market with buyer and seller competing.  There are no formuals, computers, magic wands, or regulations, only the action of the crowd.

There is only one thing that drives the market and this is BUYERS.

Without buyers the market will fall, when there are many buyers the market will rise.   When the buyers don't show up or loose interest, the only ones around are sellers, so the market drops.

Although the market makers and the specialist try to help control the flow of the market, they can't stop the sellers from knocking the market if there are no buyers around to support it.

Answer 5

People who buy shares decide at what price they are willing to buy.  And they bid for shares at that price.

And people who sell shares decide at what price they are willing to sell their shares.  And they ask buyers to pay that price.

When the buyer's bidding price coincides with the seller's asking price.  Then shares are sold at that price.  And this price then becomes the latest price for all shares of that stock.

The price of any stock is the price at which some of its shares were sold last time.  And this price changes all the tiime when the market is open.  Because many people are buying and selling their shares at various prices.

Buyers and sellers decide together whether the stock  price goes up or down.