When more people buy a certain stock does it make the stock price drop or increase?
THE SHORT ANSWER: More buyers than sellers is the ONLY reason stocks can go up in price. Every other reason you think causes the price to change is in fact causing the number of buyers and sellers to change instead. THE LONG ANSWER: Stock brokers receive thousands of orders from different people to buy and sell a stock. The brokers do their best to match up the orders. Example: Here’s a list of orders from seven different people that a broker may have in hand: B1) Buy 100 shares, pay no more than $30.15 B2) Buy 300 shares, pay no more than $30.17 B3) Buy 200 shares, pay no more than $30.18 S1) Sell 50 shares, sell for no less than $30.20 S2) Sell 100 shares, sell for no less than $30.18 S3) Sell 100 shares, sell for no less than $30.17 S4) Sell 200 shares, sell for no less than $30.16 Order S1 won’t get filled, because that seller can’t agree with anyone on a price. Same for B1, nobody’s willing to go that low. So, those are ignored, for now. B2) Buy 300 shares, pay no more than $30.17
