What causes a stock's share price to drop for the day when more shares are purchsed than sold for that day?

Question

I am very new to investing and from the research and learning I've done from books thus far. All they ever say is stock price rises when there is more demand for shares. I have just been doing "paper investing" so far as building knowledge. The stocks I have been interested in always seem to drop daily when the ratio of shares purchased to sold are 2:1. These daily share price drops are sometimes considerable. These are also companies with no recent bad news or predicted trouble for the future. Is something like this caused by market manipulation, short sellers, etc. I appreciate all answers and thank you in advance!!!!

Answer 1

It's not possible to have more shares bought than sold, unless the company issues new shares and sells them on the market for the first time.  Which doesn't happen very often.

The shares have to come from somewhere when people buy them.  And if no new shares are being sold on the market.  Then for every buyer there must be a seller in equal proportion.

Answer 2

  Price drops often result in increased purchases.   There must be buyers and sellers, and between them, they agree on a price.  

Imagine you hold a number of shares in a stock that is decreasing. You can sell now, for a lower price than you paid, or hang on and see if it turns around.  If you hang onto it, you may be repeatedly faced with the same decision.  How much faith do you have in the company?

If the value of a stock is rising rapidly, trading volume may be low, as the stockholders all want to hold onto it.  This does not mean that demand is low.   People who want to buy it will be willing to pay more, and eventually a trade price is determined.

Stock prices go up and down for various reasons, some of which may not be obvious.  Inside traders, institutional buyers, and computerized algorithms may result in sudden volume surges, which may attract other buyers and sellers.  

Good luck.

Grandpa  

Answer 3

Naked short selling creates Phantom Shares.

I cannot believe the SEC turns a blind eye toward this practice.  

Answer 4

There can't be more shares purchased than sold. Every share purchased must have a seller, right?