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Thanks, Rusty! I’m not sure which orifice the million number came from but clearly wrong. Yesterday’s volume was 42.86 million shares. That probably translates into tens of thousands of transactions - still a highly liquid market. On the subject of volume, if we see a reduction in volume today, together with share price stability around existing levels, this might indicate that a base is building around 250 from which advances could be made (just wondering). The Chairman’s purchase, though underwhelming, should help to create a floor, at least for now.
Adam....... 22k trades maybe but not millions ?
Gla R.
@ Wyndrum. Your paradoxical rule “Sellers force the price up, buyers force the price down” is useful in explaining the price dynamics of a single transaction, or a very small number of transactions, in a slow-moving illiquid market (eg real estate, rare stamps, the obscure recesses of the AIM market). But in a densely populated, highly liquid and generally efficient market like Boo (where yesterday there were over 22 million transactions, according to the LSE) the rule seems much less convincing, since it is the law of supply and demand (preponderance of sellers v. buyers or vice versa) which determines the price movement. At least that’s how I see it, though you are perfectly entitled to disagree.
Sorry adam I can't convince you. Yes there is demand to buy the share but it is the seller who forces the SP up.
Wyndrum, You seem to have illustrated my point. In the example you give, the transaction at the higher price 255p was, as you describe it, the result of greed and FOMO - the buyer deciding to pay more than he originally wanted to pay in order to get on board. In the absence of those emotions (the buyer’s motivation to buy) there would have been no transaction. The buyer would have been willing to wait patiently for a lower price.
On the other hand, if the person who had bought at 250p (now the seller) was overcome with fear of incurring greater loss (or if he was overleveraged and had to sell) he would be willing to sell at a lower price, thereby creating supply which is matched by a willing buyer at (say) 245p. In this example, it is the creation of additional supply (the seller’s motivation to sell) which makes possible the transaction at a lower price.
Thanks for that insight David good luck with your research
Can't believe people who are trading real money have a need to discuss something as basic as the the Law of Supply and Demand!
If you don't understand the Law of Supply and Demand by now please close your trading accounts and stick your money in a savings account, it will be safer.
End of a free public service announcement, brought to you today by someone who fell asleep at about 3pm and woke at 4:35pm due to too many late nights researching!!!
Adam, your logic is correct but your conclusion is not. yes in your example there is demand to buy the stock but the price of the purchase is determined by the seller. And of course you never run out of stock. The stock remains the same, and that 1000 share purchaser at 250p will at some stage be a seller. lets say you are right and all the sellers have sold... (except they haven't, the stock is now transferred to so what was a buyer), so now somebody , me, wants to buy at 252p but there are no sellers left who want to sell at that price, but our 1000 shareholder at 250p will sell at 255p to me, so who has forced the SP up, me or the seller? I didn't want to pay that much but wanted to get on board because I think 300p is coming soon, so I don't mind paying a bit more (coz I'm greedy and at the same time fearful I will miss out) .
Every buyer sooner or later becomes a seller. the amount of stock available remains the same.3
So the irony is all these lower SP's are because of buyers forcing the sellers to sell lower because the sellers were fearful it would go lower still.....(Bloody buyers... you are your own worst enemies!)
Wyndrum - interesting topic.
Comic: Wyndrum - sorry that was not clear. If you don't have a buyer then the price drops because the seller can not sell.
Well, yes that's true but it cuts both ways, if neither blinks then no trade takes place. You are assuming the seller MUST sell or in the other position, the Buyer MUST buy.
comic, Its only people that buy and sell shares (don't go into the algo's thing as a, it gets too complicated and b, you would have a point)
And people are pack animals with herd instincts and react to emotional stimuli of which fear and greed are two of the strongest and therefore most easily manipulated. If you believe people are predictable then charts are a great help as all a chart is, is the graphical representation of peoples buys and sells, which are emotionally driven, nothing to do with fundametals. (well a bit, but not as much as you would think)
And people are not rational, that is just a pretence, a delusion we all suffer from to some extent or another.
In this game the less emotional you are the easier it is to make better calls and that's only because the majority are easily manipulated. if they were not, trading by and large would stop. we would all be in trackers I guess. And where is the fun in that?
Wyndrum: Let’s assume someone is selling 1,000 shares at 250p. If someone buys those 1,000 at 250p, the shares are no longer available. The next offer to sell may be 500 shares at 251p. If someone buys those shares, the next offer may be 200 shares at 252p. Replicated on a massive scale, that's how any market works. It’s all a question of supply and demand. If the volume of demand (buy)is greater than the supply (sell) the price goes up. Your scenario works only if the supply (sell) is greater than the demand, or there is broad equilibrium between the two.
Wyndrum - sorry that was not clear. If you don't have a buyer then the price drops because the seller can not sell.
Wyndrum - also if you have not bought you are not a buyer lol.
Wyndrum - behavioural science may be what your thinking. I do get your point though. To be honest how the share price is decided is a mystery to me.
DNP:"Buyer have to be there to buy your sell... otherwise if no one wants to buy you will have to lower your price".
Yes, exactly the seller will be forced to lower his price to attract a buyer. The buyer will have forced the SP down
Sure if no one sold then price would go up...as there will be less shares available ... Seller will sell when there target is reached lot sell in LOSS to remember that...
If you think I've got this back to front, ask yourself, what price will you sell at? Say its 500p and the SP is only at 450p. You hang on until its 500p (you could have sold at 450p but you did not, you ultimately forced the SP up to 500p, you made some buyer pay more than the 450p that was on offer previously. You did that, you, the seller.
Buyer have to be there to buy your sell... otherwise if no one wants to buy you will have to lower your price.. wyndrum now did that make sense
wyndrum you just said if seller don't want to sell buyer have to up the offer... so buyers are the one pushing the price up...
250.10 close , hope good RNS tomorrow and back up we go... otherwise looks like this will play around 240-270...
That's right comic, supply and demand, you are just looking at the wrong end of the telescope. Do you think buyers always want to pay over the odds for their purchase?
They can't buy unless the sellers sell and if the seller does not want to sell, then the buyer will have to up his offer, so its sellers who force the price up
Sunset , rather lovely thanks for asking :)
Thanks Comic .. buyers helps and again depends on shares. I have seen more sellers and price have RISEN.. depends all what sort of NEWS we get if RNS is good sellers can sell but price do RISE may be bit less the what it should have RISEN but totally with you on supply and demand.. But wyndrum way was quite interesting to
@wyndrum - sorry buddy buyers make the price go up. More buyers higher price. Simple supply and demand. That's why we have the bid and ask price. Obviously other market reactions can also effect the price