3 ms·

What is an artificial price and how does it differ from a real price?

• SpicyLemonZest 6y ago
  It's a price that "does not reflect legitimate forces of supply and demand". One of the canonical examples of an artificial price is spoofing, where you set up fake sell orders to trick people into thinking a stock is crashing so you can buy it at a discount.
  • ralph84 6y ago
    So when people who want to buy and have the funds to buy are prevented from buying by their broker, would the resulting price be one that "does not reflect legitimate forces of supply and demand"?
    • SpicyLemonZest 6y ago
      In general, no, brokers being unwilling or unable to help facilitate a trade is a legitimate market factor. There's no fundamental right to have people trade with you. It's would of course be a different story if the broker's unwillingness came from their participation in a price manipulation scheme. I don't think that's really plausible here, although I suppose I wouldn't rule it out given the crazy dumb things Robinhood has done in the past.
• ulber 6y ago
  The "legitimate forces of supply and demand" seems to be the critical part there. GME stock didn't go up because /u/DeepFuckingValue bought so much of it, it went up because everyone else did. In August 2019 GME had a market cap of $300 million so there was no way /u/DeepFuckingValue buying some hundreds of thousands worth had any real effect on its own.