Saturday, 28 November 2015


Basically it comes down to supply and demand.

If more people want a particular share than already own it, it will drive the market price of that share up if people don't want it and more people are motivated to sell it it will drive the price down.

There are a lot of reasons why people may want to hold or sell off a particular commodity these may include:

Company performance a good or poor performance at reporting time or any time news or data is released can move the price of a share around, especially around the time of dividend payouts and announcements

An extraordinary event like a disaster - like a mining collapse, senior  management being indicted for fraud... or takeover bid,

Market sentiment - which can include random fear or optimism for a range of reasons, like threat of war, fear or expectations of interest rates moving up and down, or even a reaction to fears like the Greek and Chinese issues of late, environmental disasters and lots more.

Institutional trading- while the average investor probably isn't going to move the price of a share around by simply buying or selling if a hedge fund or bank decides to offload or buy a bunch of shares for whatever reason it may have nothing to do with the performance of the company itself this can move the price around in a big way

Triggered Selling - this is a hard one to gauge but a sharp movement in price of any commodity share or index may trigger off a bunch of sell or buy orders that people have previously put in the market and move the price of that commodity around as well.  Since much trading is done online and executed by computers this can really come into play in what I call 'flash crashes'

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