Stock gurus, help answer this question

[El Diablo Blanco]

Why does a stock go down in price when there is a sell off?

let me explain.  Say a stock is at $100 a share and someone decides to sell their lot of 10,000 shares at that price.  For them to sell, doesn't it mean that someone else has to buy the stock at $100 per share?  So basically it's an even trade, yet whenever this happens, stocks then take a big dip in price.

Why does the price go down when people are buying and selling at the market value that it is currently set at?

what causes this $100 per share stock to drop to say $50 when people are selling it at the $100 level and people are buying at the same price?

Something doesn't add up here.

[Freemason]

Supply and demand. Whenever there is a lot of people selling those sales are going to happen pretty much that day. So if there are not a lot of buyers eager to snap it up the price has to go lower to get them sold. Companies with millions of shares can handle quite a bit of trading with no negative and often positive effects on price. But if a huge chunk of a company’s stock hits the market in a short time the price will go down. Combine that with the fact that sell offs are usually the result of public bad news for said company.

Let’s say your house is worth $150/square foot. So are all the comparable homes in your neighborhood. If it’s a desired area, and just a few or even one home lists a year, the prices will naturally go up-often in bidding wars.

Now imagine a sell off-everyone lists at once and needs to sell immediately. And combine that with news that sink holes have begun to plague the area. Where do the prices go? Down.

[mphgrove]

Exactly as above. And the following has often happened to me: When you call your broker to sell, most people don’t tell him or her exactly what price to sell at. Often it’s at $100 when you call him, and you are sad to discover that he only got $98 for it a few minutes later when he made the sale.

[King Shizzo]

It appears that a massive batch of new accounts (prospects) are suddenly posting.

Good luck.

[Vince G, CSN MFT]

Supply and demand. Whenever there is a lot of people selling those sales are going to happen pretty much that day. So if there are not a lot of buyers eager to snap it up the price has to go lower to get them sold. Companies with millions of shares can handle quite a bit of trading with no negative and often positive effects on price. But if a huge chunk of a company’s stock hits the market in a short time the price will go down. Combine that with the fact that sell offs are usually the result of public bad news for said company.

Let’s say your house is worth $150/square foot. So are all the comparable homes in your neighborhood. If it’s a desired area, and just a few or even one home lists a year, the prices will naturally go up-often in bidding wars.

Now imagine a sell off-everyone lists at once and needs to sell immediately. And combine that with news that sink holes have begun to plague the area. Where do the prices go? Down.

This

[OlympiaGym]

Exactly as above. And the following has often happened to me: When you call your broker to sell, most people don’t tell him or her exactly what price to sell at. Often it’s at $100 when you call him, and you are sad to discover that he only got $98 for it a few minutes later when he made the sale.

People still call a broker to sell stocks? I’m old but even I haven’t used a broker in probably 30 years or more. It’s all online.

[King Shizzo]

Stocks are completely made up. Sure, regular people can make money, just like winning the lottery.

It's the ultra rich that continue to benefit from all of it.

What the hell is a stock? It was bitcoin before bitcoin.

Remember the McDonald's Monopoly scandal?

It's all about the right people making the real money.

[IroNat]

Stocks are completely made up. Sure, regular people can make money, just like winning the lottery.

It's the ultra rich that continue to benefit from all of it.

What the hell is a stock? It was bitcoin before bitcoin.

Remember the McDonald's Monopoly scandal?

It's all about the right people making the real money.

Issuing stock is a way for companies to raise capital initially.  The company issues stock in exchange for money so it can expand or whatever.

The stock is a right of ownership in the company.  A "share" of ownership with other stockholders.  Stock could be publicly traded or privately held stock.

After the initial offerings (if it's a publicly traded), stockholders can buy or sell the stock to others who want to buy or sell it.

The stock may pay dividends periodically, which is a return of the company's earnings to the shareholders.  If I pay $100 for a share of stock and get a dividend of $6 each year that is a 6% return on the stock.  It also will flucuate in value based on demand for the stock.

If investors believe the earnings of the company and the growth of the company will increase in the future they may be willing to pay more for the stock (like Tesla or Apple).

Wealthy Getbiggers make tons of money wisely investing in stocks and the stock market.

Poor Getbiggers believe it's all a scam and don't invest and stay poor and continue whining how only the rich benefit from investing in stocks.

[El Diablo Blanco]

so basically it's desperate people trying to undersell each other to get their stocks sold.

So guy A has 10K shares and wants $100 which is market value
Guy B wants to sell his 10K shares but knows there's a lot of people asking $100 so he asks for $98.
Guy C needs to undersell Guy B so he asks for $96 etc... 

It is pure manipulation though that causes the stocks to fall so fast.

[King Shizzo]

Issuing stock is a way for companies to raise capital initially.  The company issues stock in exchange for money so it can expand or whatever.

The stock is a right of ownership in the company.  A "share" of ownership with other stockholders.  Stock could be publicly traded or privately held stock.

After the initial offerings (if it's a publicly traded), stockholders can buy or sell the stock to others who want to buy or sell it.

The stock may pay dividends periodically, which is a return of the company's earnings to the shareholders.  If I pay $100 for a share of stock and get a dividend of $6 each year that is a 6% return on the stock.  It also will flucuate in value based on demand for the stock.

If investors believe the earnings of the company and the growth of the company will increase in the future they may be willing to pay more for the stock (like Tesla or Apple).

Wealthy Getbiggers make tons of money wisely investing in stocks and the stock market.

Poor Getbiggers believe it's all a scam and don't invest and stay poor and continue whining how only the rich benefit from investing in stocks.

I know what a 401k is. I know what stocks claim to be.

It's still made up. Gold, diamonds, lobster (the roach of the sea)

The lemmings eat it up.

[IroNat]

so basically it's desperate people trying to undersell each other to get their stocks sold.

So guy A has 10K shares and wants $100 which is market value
Guy B wants to sell his 10K shares but knows there's a lot of people asking $100 so he asks for $98.
Guy C needs to undersell Guy B so he asks for $96 etc... 

It is pure manipulation though that causes the stocks to fall so fast.

Buyers bid for the stock.

[IroNat]

I know what a 401k is. I know what stocks claim to be.

It's still made up. Gold, diamonds, lobster (the roach of the sea)

The lemmings eat it up.

No, it's not made up.

Say I own 100% of my company.  I started it and built it up.  Now I need capital to expand.

I sell 60% of my company by going public with a stock offering of 500,000 shares.  Each share is valued based on it's % of the company's worth at that time.  They stock is sold, the money raised allows me to expand the business.  I still hold 40% ownership which plenty to control the company as the rest of the shares are owned by many shareholders.

(Bill Gates only owns a little over 1% of Microsoft now.  Yet he's worth crazy billions.)

Now, my company is going gangbusters and growing like crazy and the capitalized value of all the stock goes up with it.

If the company was completely liquidated or sold intact today, all assets sold off, debts paid off, and the proceeds distributed to the owners (stockholders), what would you get?  The proceeds divided by the stock shares basically.

That's the ideal scenario.  In the real world speculators get involved and may bid up the price over and above its capitalized values.

This becomes a game of hot potato for the stockholders if they bought in at high prices since eventually the stock price may return to reasonable values.

Tesla is an example of a stock that is crazily valued at this time out of all proportion to the revenue it generates, etc.  Why?  People think it's future potential is great and they are playing hot potato, paying way over its capitalized value.  May or may not come to fruition. 

So, if you're smart, should you buy Tesla?  Depends on what you believe the future to hold.  It's risky.

The stock market currently is over-valued by quite a bit.  Should you buy in now or wait till it drops?  What is your alternative?  Stay in cash.  Invest in CDs that pay 0.5%?  Buy real estate?  You have a few options but not many.

Some times real estate is the right choice, sometimes its the wrong choice.  The stock market is the same way.  You have to make wise choices.

Having a 401k or IRA is not enough.  You have to make wise choices where your 401k is invested.  These programs are not designed to make you rich.  They are designed to invest money you made doing something else to create the money.

[sync pulse]

If there is a group of people conspiring to bid up the price of stock...then sell all they have at once.  The original group gets the money.  It's called "Pump-and-Dump"

[sync pulse]

Wait 'til he learns about short selling....and leveraging margins..

[King Shizzo]

No, it's not made up.

Say I own 100% of my company.  I started it and built it up.  Now I need capital to expand.

I sell 60% of my company by going public with a stock offering of 500,000 shares.  Each share is valued based on it's % of the company's worth at that time.  They stock is sold, the money raised allows me to expand the business.  I still hold 40% ownership which plenty to control the company as the rest of the shares are owned by many shareholders.

(Bill Gates only owns a little over 1% of Microsoft now.  Yet he's worth crazy billions.)

Now, my company is going gangbusters and growing like crazy and the capitalized value of all the stock goes up with it.

If the company was completely liquidated or sold intact today, all assets sold off, debts paid off, and the proceeds distributed to the owners (stockholders), what would you get?  The proceeds divided by the stock shares basically.

That's the ideal scenario.  In the real world speculators get involved and may bid up the price over and above its capitalized values.

This becomes a game of hot potato for the stockholders if they bought in at high prices since eventually the stock price may return to reasonable values.

Tesla is an example of a stock that is crazily valued at this time out of all proportion to the revenue it generates, etc.  Why?  People think it's future potential is great and they are playing hot potato, paying way over its capitalized value.  May or may not come to fruition. 

So, if you're smart, should you buy Tesla?  Depends on what you believe the future to hold.  It's risky.

The stock market currently is over-valued by quite a bit.  Should you buy in now or wait till it drops?  What is your alternative?  Stay in cash.  Invest in CDs that pay 0.5%?  Buy real estate?  You have a few options but not many.

Some times real estate is the right choice, sometimes its the wrong choice.  The stock market is the same way.  You have to make wise choices.

Having a 401k or IRA is not enough.  You have to make wise choices where your 401k is invested.  These programs are not designed to make you rich.  They are designed to invest money you made doing something else to create the money.

Of course the math adds up....it's still something that is completely made up.

That's why the government can continue to print money and give stimuluses, while being trillions in debt.

It's all for show.

[Dokey111]

This

haha there you go, you've heard from the expert

[sync pulse]

https://en.wikipedia.org/wiki/Technical_analysis

This will make your head spin...

[mphgrove]

People still call a broker to sell stocks? I’m old but even I haven’t used a broker in probably 30 years or more. It’s all online.

Huge numbers of people still do, especially as the portfolios get larger. Some customers split themselves between a “managed” account and an online self-managed account offered by the same company. That trend of dual accounts has accelerated in this last year with everyone at home.

[OlympiaGym]

Huge numbers of people still do, especially as the portfolios get larger. Some customers split themselves between a “managed” account and an online self-managed account offered by the same company. That trend of dual accounts has accelerated in this last year with everyone at home.

That surprises me. Maybe my portfolio isn’t as big as I think - haha.

[mphgrove]

That surprises me. Maybe my portfolio isn’t as big as I think - haha.

The split between managed and non-managed within the different size portfolio brackets would be an interesting statistic to know. It seems to me that LOTS of people don’t have the self confidence (or proper skills) to do it on their own. But I would guess you are correct that the overall trend is toward online, as with everything else.

[IroNat]

Getbiggers don't have time to manage their vast portfolios as they are too busy banging 11s, traveling to Monaco, and other pursuits of the .001%.

[mphgrove]

Getbiggers don't have time to manage their vast portfolios as they are too busy banging 11s, traveling to Monaco, and other pursuits of the .001%.

Stopping in on the basement every now and then to check on Mom and for clean laundry.

[OlympiaGym]

I spend maybe 15 minutes a day looking at my stocks. I usually only have money to buy more when I get my year-end bonus and then it’s only “blue chip,” dividend paying type stuff. I’ll only occasionally put a few bucks into a “hot stock” but I usually wind up regretting it. For example, I lost a couple of grand betting on silver stocks this year. Not enough to make a difference in my life but enough to annoy me. My hope is to move this into a trust in the next 10 years and leave it for the kids.

[El Diablo Blanco]

I spend maybe 15 minutes a day looking at my stocks. I usually only have money to buy more when I get my year-end bonus and then it’s only “blue chip,” dividend paying type stuff. I’ll only occasionally put a few bucks into a “hot stock” but I usually wind up regretting it. For example, I lost a couple of grand betting on silver stocks this year. Not enough to make a difference in my life but enough to annoy me. My hope is to move this into a trust in the next 10 years and leave it for the kids.

Nice move, give the kids a nice start in life.  Too bad most people don't think this way.

[visualizeperfection]

It appears that a massive batch of new accounts (prospects) are suddenly posting.

Good luck.

Posting about posting.

Fuck off.