ADVERTISEMENT

Health & Wealth Blog

HealthAndWealthHQ.com ~ Stay Healthy and Get Wealthy

Home | Health & Wealth Articles | Contact Us | About Us | Legal Information

Stock Quotes

Staff Writer ~ HealthAndWealthHQ.com
Jan. 30, 2021 9:48 a.m. PT
Follow me @ HealthAndWealthHQ.com

ock quotes are always in flux.

Stock Quotes

Stock quotes are always in flux. The price of a stock is changing because it underlies the laws of supply and demand. Imagine that the price of a stock on the stock exchange always reflects the value of the underlying company in the far or near future and not the current value, then you will understand that the stock price has to change in the present all time. Peopleís belief about the companyís future value drives the stock pricing.

  1. Stock Quotes Are Made By The Market Makers
  2. Market Maker Has To Buy Or Sell From You Even When He Has Nobody Else To Trade With
  3. Stock Quotes Are Changing Because The Spread Changes
  4. A Stock Is Just A Portion Of The Company
  5. The Market Could Go Up Or Down

Stock Quotes Are Made By The Market Makers

Stock quotes are made by the market makers. Itís their job to make the market in a stock and therefore they have to post a current bid and ask price at all times during market hours.

The bid price is the price where the market maker will buy from you. The ask price is the price where he sells to you. You must always buy the higher ask and can only sell to the lower bid price. The difference is called the spread and it is the income of the market maker.

Market Maker Has To Buy Or Sell From You Even When He Has Nobody Else To Trade With

If you put yourself in the role of the market maker then you will understand how it works. He has to buy or sell from you even when he has nobody else to trade with. Thatís his job but it has big risks. The only way to control this risk is to control the spread.

Stock Quotes Are Changing Because The Spread Changes

Thatís why stock quotes are changing as well because the spread changes. The spread will widen for instance when there is very low share volume or when the stock moves very fast. Both situations inherit higher risk for the market maker, therefore the higher spread. On the other side a slow market will narrow the spread. Also when a lot of buyers and sellers lining up the risk is reduced and the spread goes down. The spread can be several points or dollars in the worst case but in the well known big stocks itís only a few cents.

A Stock Is Just A Portion Of The Company

Normally a stock is just a portion of the company and therefore should reflect the value of the company and nothing else. In the very long term this is maybe true but short and mid term there are too many things that influence the perceived value. The stock quotes can change several points or percent within hours although nothing new had happened to the company itself but certain factors were interpreted to have effect now or later.

The Market Could Go Up Or Down

If the overall market is positive for instance, then your stock is likely to go up too because people believe it will. The stock price can go down dramatically in one day although the company reported good earnings the very same day. Just because there were bad general or sector news. The market went down and took your stock with it.

Donít make the mistake to believe that you can predict share prices. Nobody can even predict the price for the next five seconds. Successful traders donít try to control the stock quotes but take the whole environment and its possible impacts into consideration.
And in case you're one of those people who would rather watch a video, here ya go!

Thank you for checking out today's article, Stock Quotes! For more great articles visit our website as often as you can!
HealthAndWealthHQ.com is our website devoted to Health & Wealth Articles. We currently have 20 health and wealth articles, and we're adding more every day. So if you are interested in Health and Wealth then we hope you'll stick around and check out more Health & Wealth Articles.
ADVERTISEMENT
ADVERTISEMENT

Understanding Asbestos

Lung cancer is the fastest growing cancer in the world. In the USA we have seen many cases of asbestos that are simply destroying entire families. Not only in states with a huge history in the... Continue Reading »

Bankruptcy Primer

Bankruptcy is the legal means of wiping out debt. It may seem like a simple solution when you get in over your head in debt. Bankruptcy, though, should not be taken lightly. There are many... Continue Reading »

Seven Tips For A Long And Healthy Life

As good as modern medical technology is, it can never save you from the problems caused by a life style that is unhealthy. Instead of getting a modern medical fix for every problem, it is far better... Continue Reading »

Webmaster Tips For Moneymaking Affiliate Programs

As a webmaster, you may be wondering how you can increase the revenue of your web site without having to go through the headache of massive program restructuring or changing the content drastically.... Continue Reading »
© Copyright 2021 Health & Wealth Blog. All Rights Reserved.

Publisher Inquiries, Contact: Jeff Johnson
Office: 448 Cummings Street, Abingdon, VA 24210 • Phone: 866-966-9932 • Email: Jeff@HealthAndWealthHQ.com
Admin