Who determines share price quotes in the stock market?
Asked by
jero1234 (
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October 11th, 2008
from iPhone
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3 Answers
It takes two to tango…Both the buyer and seller….the seller is willing to “let go” of his shares at a certain price and the buyer is willing to “accept” the shares at that price. Each buyer/seller has their own price that they are willing to enter/exit the market at…It’s kind of like when you go to a garage sale….At the beginning of the day, you might ask the seller how much for a jacket. At the beginning of the day, they would expect a hgiher price….if you are not willing to buy at that price…then you walk away. The seller might be able to fetch that price and complete the transaction or if there is no demand, you might be able to come back later that day and ask a much lower price which the seller will probably take or he might say no and wait for another garage sale to sell at his desired price…
Buyers do – if there are more shares on sale than people to buy them.
Sellers do – if there are more people that want to buy shares than there are shares to go around.
It’s basically an auction. Who determines the price of something on eBay? It’s something like that.
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