Buy/sell differentiation
- Thread starter colg
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Firstly, welcome to ASF 
The answer's actually quite simple and to illustrate, I'll use HSN (Hansen Technologies) as the example.
Note that there's no particular reason why I've chosen that stock, only that I had to pick something.
Looking at yesterday's trading and specifically at the first trades of the day, we see this:
So at 10:04:24 the first trade was for 87 shares at $5.61 each. The next trade was 19 shares also at $5.61 each. And so on.
For each trade there's a buyer and a seller. One person (or company etc) is selling, someone else is buying. So 87 shares changed ownership in that first transaction - someone sold them and someone else bought them.
For one person to buy, someone else must sell and vice versa, in order to sell there needs to be a buyer.
Many traders will have their own (self-imposed) rules regarding liquidity for this reason. Whatever you're buying, at some future time you'll sell and actually selling a stock with very low trading volume can be problematic. For example:
Three trades took place, each which must have a buyer and a seller, for the whole day and the total value of those trades was $2643.88
The problem with a stock like that is that if you owned a substantial quantity, actually selling them would be difficult in practice since there just aren't that many transactions taking place. Many traders simply won't buy stocks with low trading volume for this reason, no matter how good an investment it might be it's a problem if you can't actually sell it at a later time.
Note that the companies I've used are for example only and are not a recommendation to buy or sell those stocks.
The answer's actually quite simple and to illustrate, I'll use HSN (Hansen Technologies) as the example.
Note that there's no particular reason why I've chosen that stock, only that I had to pick something.
Looking at yesterday's trading and specifically at the first trades of the day, we see this:
So at 10:04:24 the first trade was for 87 shares at $5.61 each. The next trade was 19 shares also at $5.61 each. And so on.
For each trade there's a buyer and a seller. One person (or company etc) is selling, someone else is buying. So 87 shares changed ownership in that first transaction - someone sold them and someone else bought them.
For one person to buy, someone else must sell and vice versa, in order to sell there needs to be a buyer.
Many traders will have their own (self-imposed) rules regarding liquidity for this reason. Whatever you're buying, at some future time you'll sell and actually selling a stock with very low trading volume can be problematic. For example:
Three trades took place, each which must have a buyer and a seller, for the whole day and the total value of those trades was $2643.88
The problem with a stock like that is that if you owned a substantial quantity, actually selling them would be difficult in practice since there just aren't that many transactions taking place. Many traders simply won't buy stocks with low trading volume for this reason, no matter how good an investment it might be it's a problem if you can't actually sell it at a later time.
Note that the companies I've used are for example only and are not a recommendation to buy or sell those stocks.
tech/a
No Ordinary Duck
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If price is rising then supply is less than demand
if price is falling then supply is more than demand.
it doesn’t necessarily mean that there are more sellers
or more buyers
Volume of buyers or sellers doesn’t necessarily see a rise or fall
in price.—— Price paid will.
if price is falling then supply is more than demand.
it doesn’t necessarily mean that there are more sellers
or more buyers
Volume of buyers or sellers doesn’t necessarily see a rise or fall
in price.—— Price paid will.
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