4 ms·

I am saying that in opposition. Sellers do not overwhelm buyers _when_ the price goes down, or vice-versa. There is no "overwhelming" of one group over the oth

by ak39 6y ago

I am saying that in opposition. Sellers do not overwhelm buyers _when_ the price goes down, or vice-versa. There is no "overwhelming" of one group over the other. Nor do prices go down _because_ of an independent phenomenon other than buying and selling. The price is judged on the _value_ sellers and buyers ascribe to the stock at a given time. If they match, a transaction takes place. In the end there are always exactly equal buyers as there are sellers.

angel_j 6y ago
Unless they are selling to themselves through a triangle of ETFs
- TheOtherHobbes 6y ago
  Or a trip switch has killed trading in an asset - or perhaps the entire market. Buyers and sellers only match under normal trading conditions. Good luck expecting your stop loss orders to mean anything when there's a mass panic.
Wh1zz 6y ago
If more people are interested to sell than to buy, that will create downward pressure on the price - even if in the end for every individual trade there is both a buyer and a seller, that is a sort of "overwhelming", if you think of the buyer as a (name, bid) pair.
mewpmewp2 6y ago
What is meant here is that if we have a closed room with 100 people. If there are 60 investors who want to sell stocks and 40 who want to buy always equally as much for simplification purposes and the price is $50, the price will keep moving down until there's 50 investors who want to sell and 50 investors who want to buy. 40 trades will happen on $50 price, but then there is 20 sellers still left who want to sell at this price. Since there are no buyers, price will go lower and slowly some sellers don't want to sell lower than $50, so there might be 15 sellers left at $45 and 5 buyers, they will do the trade and then there will be 10 sellers left. let's at $40 there will be 5 who decided it's good to buy now and this is where the fair price will have landed, at $40.

by ak39 6y ago

angel_j 6y ago

Unless they are selling to themselves through a triangle of ETFs

TheOtherHobbes 6y ago
Or a trip switch has killed trading in an asset - or perhaps the entire market. Buyers and sellers only match under normal trading conditions. Good luck expecting your stop loss orders to mean anything when there's a mass panic.

Wh1zz 6y ago

If more people are interested to sell than to buy, that will create downward pressure on the price - even if in the end for every individual trade there is both a buyer and a seller, that is a sort of "overwhelming", if you think of the buyer as a (name, bid) pair.

mewpmewp2 6y ago

What is meant here is that if we have a closed room with 100 people. If there are 60 investors who want to sell stocks and 40 who want to buy always equally as much for simplification purposes and the price is $50, the price will keep moving down until there's 50 investors who want to sell and 50 investors who want to buy. 40 trades will happen on $50 price, but then there is 20 sellers still left who want to sell at this price. Since there are no buyers, price will go lower and slowly some sellers don't want to sell lower than $50, so there might be 15 sellers left at $45 and 5 buyers, they will do the trade and then there will be 10 sellers left. let's at $40 there will be 5 who decided it's good to buy now and this is where the fair price will have landed, at $40.