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Experts please - how do the markets work?? (WORK)     

Kivver - 18 Jan 2006 14:25

How can there be a day of buying and very little selling and the price doesnt move. Today (so far) there has been over milion and a half buys of iqe (iqe) a 100,000 sells of shares and price hasn't moved!!!! How does that happen?????

Kivver - 18 Jan 2006 16:37 - 2 of 7

It just got weirder, a 2 and 1/2 million sell comes in late in the day and the price goes up. Barmy

hewittalan6 - 18 Jan 2006 16:41 - 3 of 7

Never get carried away with the idea that the market is a perfect model of supply and demand. It's not. It's more horse trading and political maneouvering, with a side serving of mis-information.
Alan

hewittalan6 - 18 Jan 2006 16:41 - 4 of 7

But I'm an amateur. Over to the experts you asked for.................

explosive - 18 Jan 2006 21:59 - 5 of 7

There are different possibilities, if a share is valued at 100p and there are say 20m buy orders placed then they must be of more than 100p for any change in price upwards. Likewise if a share is valued at 100p and all buy orders average 98p then the price/bid will fall..... Like Alan points out this no way a perfect supply and demand scenario because usualy there are far more shares to trade than are demanded at a given time (ever wanted to sell but couldn't without reducing your offer price). New share issues and sales of shares by major shareholders or directors including cashing in of options increase the supply of shares (bearish). Buyback and cash takeovers reduce supply of shares (bullish). Have another look at iqe, look at the buy traded prices and also look at the spread. Maybe the price didn't change but the spread tightened. Or maybe iqe applied for additional shares to be added to the market to raise funds countering any buying sp increase...

superrod - 18 Jan 2006 22:03 - 6 of 7

Kivver
take little notice of what you see on your monitor.....buys or sells ....who knows?


this may give you an insight....


i put in a buy order for PRTY @ 150p

i have 15 seconds to confirm

the price goes to 150.5 during that time.

i accept 150p

my trade was a buy but is flagged as a sell.

Gausie - 18 Jan 2006 22:07 - 7 of 7

This comes up time and time again.

There is no such thing as a buy without a sell, and no such thing as a sell without a buy.

If you buy - then someone has sold. If you sell, then someone has bought.

MAM classifies trades as buys and sells because there is a demand among less sophisticated traders for this information. But it IS MEANINGLESS.

Kivver - you have observed that there is no correlation between 'buys', 'sells' and prices. You're right.

G
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