Darian
07-06-2003, 02:30 AM
I know it is the market which determines the price that is shown. But which entity constantly calculates the number that is shown as the correct price for a precise stock at a particular time in the market? I mean all news channels, and news sites share the same numbers, who calculated them(source from which they all took it)? Who oversees them?Hmmm? From what I understand people can trade and ask for a price or buy for a price. There are countless individual trades/transactions. I don't think it is determined by the last such trade as it would fluctuate to wildly.For example: If Bill Gates says hey I'm buying 1 microsoft stock at 1000$, and that happens to be the last stock. It can't be valued for 1000$,If someone else comes and buys a few for a 1 cent, and that happens to be the last trade for that particular time(hour minute, etc), That won't be the given value of the stock.I've heard it's some average of the trading prices that is given, but given that all news and internet sites give the same number, they agree, it must come from an individual source.Since it is constantly changing throughout the day and always all sources agree, it must be constantly produced somehow by this 'source'.So what organization is it? and who oversees this organization?The last one? That seems a bit arbitrary and abusable. Can an individual or corporation then make a large number of small consecutive trades for a large price with fellow stock holders, and then sell a large number of stock to the general market?I should also add that in such a system, it would seem that a group of investors with large amounts of assets, making lots of small trades could significantly influence the market. Specially if they time it to coincide with the last trade of many sequential time periods.They could induce automated systems to buy for more than a stock is worth, or cause a panic by selling between themselves various stocks and buying at ever lower prices.So does trade/transaction size influence its quotability in terms of price?"He (or she) sets the price based on how many people are willing to buy and sell at what price. The published price, as someone said, is the price of last trade. But what if you want to buy or sell? The market maker or specialist sets the price."It seems the 'true origin' of the price at any moment is a particular entity, from your post, not a random trade that coincided with the last time the price was updated.It still a bit strange, especially if the last random trade defines the price. As I could see large investors easily carrying penny stock like scams with the regular stocks by carefully manipulating their buying and selling along with the added promotion and hype by brokers, news agencies, internet, etc. of involved stocks rising in value.