Who is buying all the shares?

[d000hg]

Unless I misunderstood, the number of shares in a company stays constant (except rare time when they release new shares or something like that). So that means for every share someone sells, someone else has to buy it?

With all the traders selling and so on, how are they finding people to buy? Is it just a case that there are always people willing to buy at a low enough price?

When I want to sell 1000 shares, does the stockbroker have to wait until he can find someone willing to buy, or are they held in some sort of limbo between selling/buying?

[DimPrawn]

Originally Posted by d000hg

Unless I misunderstood, the number of shares in a company stays constant (except rare time when they release new shares or something like that). So that means for every share someone sells, someone else has to buy it?

With all the traders selling and so on, how are they finding people to buy? Is it just a case that there are always people willing to buy at a low enough price?

When I want to sell 1000 shares, does the stockbroker have to wait until he can find someone willing to buy, or are they held in some sort of limbo between selling/buying?

They are all bought by idiot IT types that think that when a company loses 90% if it's value, it means it is a bargain and the share price will shoot back up again.

[BlasterBates]

me well just a few.

There are millions and millions of investors not all sell at the same time otherwise the shares would be 0.

aha just read DP's post ha ha

[Cyberman]

Never catch a falling knife. Been there and never again....... SMUG

[Moscow Mule]

The price is set by the market makers - at what they are prepared to pay for a share. It doesn't mean anybody is prepared to sell at those prices, which is why you get spreads.

[Mailman_1]

It mostly depends on the liquidity of the companies shares (How many are traded in a day).

If a stock has a high liquidity ie Microsoft at an average volume of 80 million shares traded in a day, chances are there will be someone who wants to buy or sell the shares at the current market value. If there are more sellers than buyers, the stock goes down. More buyers than sellers, the stock goes up.

Low liquidity stocks on the other hand are harder to buy and sell and the price spread is usually larger.

[HairyArsedBloke]

Short sellers covering

[Bagpuss]

You shouldn't be buying shares if you don't understand the function of a Market maker.

[Ravello]

Originally Posted by Bagpuss

You shouldn't be buying shares if you don't understand the function of a Market maker.

Just to be contrary (I'm in that sort of mood)... Why not? I don't need to understand mechanics and combustion to drive a car. If, for whatever reason, I think a company's long term prospects are good, why do I care what a Market Maker does?

To balance my argument slightly, I would agree that it's probably best not to dabble with day trading if you don't know the function of a Market Maker.

[chef]

i have a magic marker if that's any use