How the Stock Market Works
shashankr.me
How the Stock Market Works
1–10 of 73 posts
Re: How the Stock Market Works
#2Great article, thank you. I still don't understand who buys and sells stocks. Is there just that much volume that if I decide to sell at a certain market price, there's guaranteed to be a buyer? Or could I decide to sell at market price but nobody actually accepts the transaction? There's some financial magic at work here that I don't quite understand.
Re: How the Stock Market Works
#3Great article, thank you. I still don't understand who buys and sells stocks. Is there just that much volume that if I decide to sell at a certain market price, there's guaranteed to be a buyer? Or could I decide to sell at market price but nobody actually accepts the transaction? There's some financial magic at work here that I don't quite understand.
You are partially right. What you miss is that there are the so called market makers - exchanges that ensure liquidity. They buy from you and sell to you while managing order books. These are simply trades records that have a key role in determining the price pressures for it go up or down.
Re: How the Stock Market Works
#4Great article, thank you. I still don't understand who buys and sells stocks. Is there just that much volume that if I decide to sell at a certain market price, there's guaranteed to be a buyer? Or could I decide to sell at market price but nobody actually accepts the transaction? There's some financial magic at work here that I don't quite understand.
You are partially right. What you miss is that there are the so called market makers - exchanges that ensure liquidity. They buy from you and sell to you while managing order books. These are simply trades records that have a key role in determining the price pressures for it go up or down.
In addition, the market makers gain profit from this activity by buying at a slightly lower price than the selling price.
Re: How the Stock Market Works
#5Great article, thank you. I still don't understand who buys and sells stocks. Is there just that much volume that if I decide to sell at a certain market price, there's guaranteed to be a buyer? Or could I decide to sell at market price but nobody actually accepts the transaction? There's some financial magic at work here that I don't quite understand.
In the US, the government makes sure the answer to that question is “yes”.
Regulation NMS
Re: How the Stock Market Works
#6I think the one important lesson that is missing here is: never ever try to be smarter than the market except you have money to lose and you like to gamble.
Re: How the Stock Market Works
#7“It’s a zero-sum game, because there are always winners and losers in the stock market.”
Is this true, outside of options? Most people are long and the stock market has always been on an uptrend.
Re: How the Stock Market Works
#8For an even deeper dive, you can check out the stock market primer our team published a couple weeks ago: https://primer.prooftrading.com
Re: How the Stock Market Works
#9Great article, thank you. I still don't understand who buys and sells stocks. Is there just that much volume that if I decide to sell at a certain market price, there's guaranteed to be a buyer? Or could I decide to sell at market price but nobody actually accepts the transaction? There's some financial magic at work here that I don't quite understand.
You are partially right. What you miss is that there are the so called market makers - exchanges that ensure liquidity. They buy from you and sell to you while managing order books. These are simply trades records that have a key role in determining the price pressures for it go up or down.
> exchanges that ensure liquidity
"market participants" which provide liquidity on an exchange.
Re: How the Stock Market Works
#10“It’s a zero-sum game, because there are always winners and losers in the stock market.” Is this true, outside of options? Most people are long and the stock market has always been on an uptrend.
Yeah, I don't think it is true - as a secondary function, shares can occasionally give dividends.