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No, that's not true. A market can move without a single security being traded. You don't need transactions for the bid/offer to descend. If a company declares

No, that's not true. A market can move without a single security being traded. You don't need transactions for the bid/offer to descend. If a company declares bankruptcy on Friday at 10pm, the stock will open lower the next week without a single share having traded.

dragonwriter 6y ago
The bid isn't the market price, neither is the ask. The market price is where bid and ask meet for a trade. > If a company declares bankruptcy on Friday at 10pm, the stock will open lower the next week If a company declares bankruptcy, trading will generally be halted on its stock, and usually existing stock will be cancelled as part of the bankruptcy reorg, even in a no liquidation bankruptcy. For more general bad news at 10pm Friday, it's true that the stock price would usually open lower on Monday, but not without trading taking place; the lower opening price is the price at which clearing occurs in the opening auction (there'd typically also be premarket trades on Monday.)
- totalZero 6y ago
  The bid/ask is a "market". If someone says "make me a market on XYZ" they're asking for a two way price. More generally a market is a place where buyers and sellers meet. The dynamics of that market can change even when no trades cross. Companies declare bankruptcy and continue trading all the time. Look at CHK. Not every bankruptcy is a liquidation. You're just making stuff up.
  - imtringued 6y ago
    Lets say I am a private individual that can print an infinite quantity of money. I can buy all the stock and relist it at overinflated prices. If nobody is buying the stock at that price it simply isn't worth the price I chose. If someone bought options that forces them to buy my stock then yes, the stock truly is worth as much as I chose. Most markets are too liquid for people to notice what happens when there is zero liquidity. Meanwhile in prosperous universe commodity exchanges are illiquid. Lots of players put up products at overinflated prices and nobody is buying them. They just stay there forever and thus do not influence the market price. Heck, some players intentionally use the commodity exchange as an infinite storage mechanism because you aren't even trading futures like in the real world, you're trading the good itself, which causes it to be immediately transported from your inventory to the commodity exchange.

dragonwriter 6y ago

The bid isn't the market price, neither is the ask. The market price is where bid and ask meet for a trade. > If a company declares bankruptcy on Friday at 10pm, the stock will open lower the next week If a company declares bankruptcy, trading will generally be halted on its stock, and usually existing stock will be cancelled as part of the bankruptcy reorg, even in a no liquidation bankruptcy. For more general bad news at 10pm Friday, it's true that the stock price would usually open lower on Monday, but not without trading taking place; the lower opening price is the price at which clearing occurs in the opening auction (there'd typically also be premarket trades on Monday.)

totalZero 6y ago
The bid/ask is a "market". If someone says "make me a market on XYZ" they're asking for a two way price. More generally a market is a place where buyers and sellers meet. The dynamics of that market can change even when no trades cross. Companies declare bankruptcy and continue trading all the time. Look at CHK. Not every bankruptcy is a liquidation. You're just making stuff up.
- imtringued 6y ago
  Lets say I am a private individual that can print an infinite quantity of money. I can buy all the stock and relist it at overinflated prices. If nobody is buying the stock at that price it simply isn't worth the price I chose. If someone bought options that forces them to buy my stock then yes, the stock truly is worth as much as I chose. Most markets are too liquid for people to notice what happens when there is zero liquidity. Meanwhile in prosperous universe commodity exchanges are illiquid. Lots of players put up products at overinflated prices and nobody is buying them. They just stay there forever and thus do not influence the market price. Heck, some players intentionally use the commodity exchange as an infinite storage mechanism because you aren't even trading futures like in the real world, you're trading the good itself, which causes it to be immediately transported from your inventory to the commodity exchange.