Why do stock prices change?
I'm not sure if I understand this correctly, but this is what I have learned. The quarter earnings for a company increase and decrease the price of their stocks. Is the change that happens in between based on people buying and selling the shares of the company. For example, if company abc opens the quarter at 10 dollars and they have a strong quarter and their stock price goes up to 11 dollars. Why does company abc fluctuate inbetween?
Comments
Buyers and sellers speculating on many different factors...of the stock (i.e. company)...the industry the co is in...and the economy as a whole.
This speculation...creates buyers and sellers...and the buying and selling basically creates the price fluctuations of the stock, during the trading day.
When there are more buyers than sellers...the price goes up. And vice versa. Hope this helps!
There is no one specific answer...a variety of forces influence the daily fluctuations in stock prices, such as the economic status on a macro scale within a particular industry and beyond, what companies may do to their stocks (ie...splits, etc.), activity of buying / selling of stocks, predictions made by economists with respects to annual stock prices, predictions at the organizational level with respects to sales / costs, etc....there are so many factors that influence these daily fluctuations...directly and indirectly...they are continually monitored up until the bell is sounded every day by the Indices of the stock market, such as Nasdaq or the Dow or the S & P.
People are trying to determine what the company is worth based on news releases, sector performance, etc. If a stock is at 10 and a company has a good quarter, the company is worth more so people will be willing to pay more.
Its not what has happened in the past. Its what happens in the future that determines the price of a stock; the future cash flows. And that involves uncertainty. So investors are trying to determine the price of the stock by the cash flows in the future and the riskiness of those cash flows based on information that comes out and what will happen in the future.
it is all due to investors' confidence on the stock and the market and the global ecnomy. And market is a wild man. Company may not have changed over the period but perception and confidence might have. So if more people are bullish, the stock price will rise. If everyone is bearish it will swoon. Read comprehensive info on this link http://www.101stockinvestments.com/