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To: Yo-Yo
Well, you see, in the stock market, when there are more sellers than buyers...

Practically speaking, if you sell something there must be a buyer, so buyers and sellers must be equal in number. It's the price they are selling at that is driving it down.

23 posted on 10/15/2008 7:30:26 AM PDT by P8riot (I carry a gun because I can't carry a cop.)
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To: P8riot; Yo-Yo
Practically speaking, if you sell something there must be a buyer, so buyers and sellers must be equal in number. It's the price they are selling at that is driving it down.

No! Yoyo is actually very correct. He said when there are more sellers than buyers, meaning when there is more supply than demand. He is 100% correct.

I have seen this fallacy several times on FR, where FReepers say the market must be 'busted/manipulated/etc' because it is 'obvious' that for every seller there must be a buyer. That is not the case. Sure, when you sell 1 share of 'Spetznaz Inc' that means someone bought that 1 share. However, what if the demand for Spetznaz Inc is very low (say only 300 bids are present for Spetznaz Inc), and supply is very high (say there are 5,000 offers for the company since everyone is trying to repatriate funds to their old aunty in Florida). Because supply is so high, and demand so low, the price of the company will go down.

The inverse is also true. If there are 10,000 people who want Spetznaz Inc, and only 250 shares available of the counter, then the price will shoot up.

Anyways, the reason the price changes is simply due to demand and supply. If there are more buyers than sellers (more bids than offers), then prices go up. If there are more sellers than buyers (and offers out-hang bids), then the price will go down.

At least people on this thread are not saying the market is moving because of McCain or Obama.

36 posted on 10/15/2008 7:49:06 AM PDT by spetznaz (Nuclear-tipped Ballistic Missiles: The Ultimate Phallic Symbol)
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