2 ms·
> For example, a single share that trades at 50% less than the last price instantly brings market cap down by 50%. It's not a single share trading low that bri
by vkou 2y ago
> For example, a single share that trades at 50% less than the last price instantly brings market cap down by 50%.
It's not a single share trading low that brings the price down, it's the entire buy order book above that price being emptied out.
Which, in effective markets, should happen reasonably quickly when a stock is overpriced, after the market has time to react to a pack of retail apes maxing out their credit cards to buy it at 'any price'.
- underlipton 2y agoIIRC, NBBO isn't affected by odd lots except outside of regular trading hours. You'd have to trade shares in multiples of 100. That's after the order book emptied to the ask/bid and a corresponding trade appeared. Then, someone could immediately decide that price was too high/low and the next trade moves it back, where the consensus keeps it.