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drunkincharge

Shares Being Sold But Price Goes Up

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Every share being sold involves exactly one seller selling that share and one buyer buying it.

The number of trades tells you nothing about the value, it does tell you there is a lot of activity which typically indicates that lots of people are acting on news about the company.

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Every share being sold involves exactly one seller selling that share and one buyer buying it.

The number of trades tells you nothing about the value, it does tell you there is a lot of activity which typically indicates that lots of people are acting on news about the company.

What about buying and selling shares makes the price move then? Surely its the relative number of shares bought to sold i.e. demand and supply.

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What about buying and selling shares makes the price move then? Surely its the relative number of shares bought to sold i.e. demand and supply.

Agree.

Every completed trade involves a buyer and a seller but the sell stack and the buy stack still have to match trades at executed prices. Depends also on the types of orders.

So to answer your question in this case - dunno, I think you'd really have to look at the buy/sell orders as they're placed and executed to see why they're ticking up or down and where the liquidity and demand is.

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Agree.

Every completed trade involves a buyer and a seller but the sell stack and the buy stack still have to match trades at executed prices. Depends also on the types of orders.

So to answer your question in this case - dunno, I think you'd really have to look at the buy/sell orders as they're placed and executed to see why they're ticking up or down and where the liquidity and demand is.

Its really odd,despite all the words and mooted trading decisions we don't know why prices change??

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Its really odd,despite all the words and mooted trading decisions we don't know why prices change??

It depends specifically on the orders, the type of orders, their size, the liquidity, how they're placed on the exchange etc etc.

Your link to the specific equity above didn't work but it looks like a low liquidity small cap which will also be a factor.

There's plenty of stuff on google about order execution & how buy/sell orders are matched. Here's some info from LSE on level 2 data for instance, showing the buy/sell stacks and the price matching.

Presumably you've already looked into that?

http://www.londonsto...level2guide.pdf

Edit: Ok, So it's AIM listed with a cap of £188m and trades on SEAQ. Wide spreads; there's a cancelled trade in there this morning for 200,000 shares (!). Seems to usually only have 1 or 2 trades a day, 30-50 trades a month. Since it's trade on SEAQ and not SETS then it's not order driven it's quote driven and you're at the mercy of the market makers. So you can pretty much ignore the SETS buy/sell stack price matching above in this case.

http://www.londonsto...87ZTG26GBGBXAIM

Edited by R K

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It depends specifically on the orders, the type of orders, their size, the liquidity, how they're placed on the exchange etc etc.

Your link to the specific equity above didn't work but it looks like a low liquidity small cap which will also be a factor.

There's plenty of stuff on google about order execution & how buy/sell orders are matched. Here's some info from LSE on level 2 data for instance, showing the buy/sell stacks and the price matching.

Presumably you've already looked into that?

http://www.londonsto...level2guide.pdf

Edit: Ok, So it's AIM listed with a cap of £188m and trades on SEAQ. Wide spreads; there's a cancelled trade in there this morning for 200,000 shares (!). Seems to usually only have 1 or 2 trades a day, 30-50 trades a month. Since it's trade on SEAQ and not SETS then it's not order driven it's quote driven and you're at the mercy of the market makers. So you can pretty much ignore the SETS buy/sell stack price matching above in this case.

http://www.londonsto...87ZTG26GBGBXAIM

Thanks.

So in this case(and others presumably)the market makers can set the price?

Then its a fix. So much for efficient markets eh?

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Thanks.

So in this case(and others presumably)the market makers can set the price?

Then its a fix. So much for efficient markets eh?

Yes, because it's traded on SEAQ. So the market makers make the quotes and spread due to the infrequent trades/liquidity because it's an Aim listed small cap.

If it's a larger cap traded on SETS then it's order driven so the bids / offers automatically go onto the bid / offer stacks and are matched by price and volume.

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Its really odd,despite all the words and mooted trading decisions we don't know why prices change??

Take a simple example of a share where the nominal price is 100p

the bid/offer spread goes from 95p to 105p

You can expect there will be a 'wall' of sellers willing to sell for 105 and another wall of buyers willing to buy at 95p, because in either case they know they can probably reverse that trade fairly quickly for a small profit.

Now lets imagine you want to sell some of these shares in a hurry, if you offer at 96p or 97p they will probably sell straight away, if you offer then at 102 or 103 you may have to wait a while until a buyer appears willing to pay that, or if the market moves in the wrong direction, you may never sell at all.

Now when this action is repeated over many sales, if the majority of sellers are prepared to lose a small percentage in return for a faster sale the price will fall, if the majority are holding out for that slightly higher bid, then the price will rise.

In small company shares (that generate few trades) the bid/offer spread will be quite wide: buy at 104 sell at 96

In big company shares (that generate many trades) the bid/offer spread will be quite narrow: buy at 101 sell at 99

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