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confused aboiut how a share price rises?     

davyairport - 29 Dec 2003 12:06

MERRY XMAS EVERYONE! CAN ANYONE EXPLAIN TO ME WHAT MAKES A SHARE PRICE RISE IN LAYMAN TERMS PLEASE! WHEN I LOOK ON THE TRADES PAGE OF A COMPANY AND SEE 1,8 MILLION SHARES BOUGHT AND ONLY 18,250 SELLS, THEN SURELY THE SHARE PRICE WOULD ALMOST CERTAINLY GO UP AND YET IT HASN'T EVEN MOVED IN THE SLIGHTEST, YOUR BASIC EXPLANATION WOULD BE MUCH APPRECIATED. MANY THANKS!!!

Kayak - 29 Dec 2003 17:25 - 4 of 4

The basic answer is that prices are nothing or very little to do with volumes bought and sold. Anyone advertising prices is perfectly entitled to quote whatever price he wants, and they do. For small cap shares traded by market makers, they set to the price to cause the volume flow that they want (in or out) and not the other way around. Of course any significant news will for all shares cause price changes on zero volume. The moral is that you can pretty much ignore buy/sell volumes except as a possible indicator of what the punters are doing. They do not mean that the price will follow in the same direction, in fact it will very often go the opposite way.
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