Roadmap · Level 2
Supply and Demand
Why stock prices move: buyers and sellers, not a price tag someone sets.
Nobody "sets" a stock's price. The price you see is simply the most recent price at which a buyer and a seller agreed to trade. Every trade has both — for each share bought, someone else sold it.
Picture it
More buyers than sellers
Buyers
Sellers
↑ Price rises
More sellers than buyers
Buyers
Sellers
↓ Price falls
When more people want to buy a stock than sell it at the current price, buyers have to offer more to get shares, and the price rises. When more people want to sell than buy, sellers have to accept less, and the price falls. That's supply and demand.
What changes how much people want a stock? Mostly new information: company results, news, the wider economy, or just a shift in how optimistic investors feel. This is why prices can move within seconds of a headline — the company itself didn't change in that moment, but how much people are willing to pay for a piece of it did.