Share Price
This query is : Resolved
09 July 2016
How demand and supply effect a share price??
19 July 2016
Stock prices are a function of supply and demand. Other influences such as earnings, the economy and so on may affect the desirability of owning (or selling) a stock.
If a company reports surprisingly low earnings, demand for the stock may decline. As it does, the balance between buyers and sellers is changed.
Buyers will demand a discount off the existing price and many motivated sellers will accommodate. More sellers than buyers means there is more supply than demand, so the price falls.
As buyers move into the market, demand grows faster than supply and the price goes up.
Some times supply and demand find a balance, which is a price that buyers accept and sellers accommodate. When supply and demand are roughly equal, prices will bounce up and down, but in a narrow price range.
It is possible for a stock to stay in this range for days or months, before something else disrupts the supply/demand balance.
There is a inter-relation ship with supply and demand and a stock’s price.
If demand for a stock exceeds the supply, its price will rise. However, it will only rise to point where buyers suspect demand is declining.
At that point, holders of the stock will sell. Some may have ridden the price up and believe a reversal is coming so they take their profits and sell.
If a company reports surprisingly low earnings, demand for the stock may decline. As it does, the balance between buyers and sellers is changed.
Buyers will demand a discount off the existing price and many motivated sellers will accommodate. More sellers than buyers means there is more supply than demand, so the price falls.
As buyers move into the market, demand grows faster than supply and the price goes up.
Some times supply and demand find a balance, which is a price that buyers accept and sellers accommodate. When supply and demand are roughly equal, prices will bounce up and down, but in a narrow price range.
It is possible for a stock to stay in this range for days or months, before something else disrupts the supply/demand balance.
There is a inter-relation ship with supply and demand and a stock’s price.
If demand for a stock exceeds the supply, its price will rise. However, it will only rise to point where buyers suspect demand is declining.
At that point, holders of the stock will sell. Some may have ridden the price up and believe a reversal is coming so they take their profits and sell.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS on Purchase of Immovable Property by NRI from NRI
- Capital gain from sale of house property
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- FORM 26A APPLICABILITY
- Value of property in capital gain
- Regarding TDS Applicability For Director Remuneration
- When TDS on GST applied
- Before GSTAT- APL-02 Vs APL-04
- Annual return in Gst
- Transporter Declaration form
- E-Invoice applicability for new Startup
- Filing of MSME 1 form by companies
- Opting our of sec 44AD
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
