ELI5 how the market ticker moves and when does bidding and selling occur??
I asked GBT but I don't understand who execute what first...
Here's what he says and here are my questions..
* IRL who actually BIDS.. who actually SELLS?
* WHO DOES IT FIRST??
* we combine online methods and you have individual people, hedge funds banking society mutual funds etc etc who does what first how does the price actually change.. I don't get it...
* take us for example we buy into VUSA OR VOO.. So... How does affect stock market. ...
* how many trade actually cause the specific price to move lol...
HERE'S GBT BASIC EXPLANATION
You said:
Explain how bid and sell cause the market ticker to move
ChatGPT said:
The market ticker moves based on the interaction of bid and ask (sell) prices in an order book. Here’s how it works:
Bid Price (Buyers' Offers) – This is the highest price that buyers are currently willing to pay for an asset. If a seller agrees to sell at this price, a trade happens.
Ask Price (Sellers' Offers) – This is the lowest price that sellers are willing to accept for an asset. If a buyer is willing to pay this price, a trade occurs.
Price Movement:
If buyers are aggressive and start placing higher bid prices, the stock or asset price moves up.
If sellers are aggressive and start placing lower ask prices, the price moves down.
If a large market order (instant buy or sell) clears existing bid or ask levels, the price can move significantly in either direction.
Market Orders vs. Limit Orders:
Market orders execute at the best available price, pushing the price up (for buys) or down (for sells).
Limit orders sit in the order book until matched, influencing the spread between bid and ask but not moving the price immediately.
Example:
A stock's bid price is £100, and the ask price is £101.
A buyer places a market buy order for 10 shares.
If the lowest available ask price is £101, the trade happens at £101, moving the ticker up.
If a seller aggressively sells at £99, it can push the ticker down.
In summary, the market price moves based on supply (sell orders) and demand (buy orders), with large or aggressive trades having the most impact.