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I was wondering something about supply and demand on a stock exchange. Suppose there is a higher selling volume than buying volume (1000 dollars vs 500 dollars). Normally the price should go down. But imagine the buyers are extremly aggresive and ready to buy (for any possible reason) always at a much higher price than best ask price. Imagine this situation is continuous with still higher selling volume. Then what would happen ? Would the price goes up or down ? Thank you :)

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Buying and selling volume is quoted in shares not dollars.

So for example, right this second the NBBO quote for NVDA is: $279.15 x $279.30 with a size of 7x2 The size means that there are 200 shares being offered for sale at $279.30 and 700 shares being bid for at $279.15

If buyer(s) take out the 200 available shares at the ask price of $279.30 and no one else comes in with an offer to sell shares at that price then the ask price shifts up to the next ask price in the order book. If that price is taken out then the ask price moves up again. When the buying pressure taps out, price rise stops. NVDA will remain at that new higher price as long as buying and selling is in equilibrium.

When aggregate selling volume takes out the bids, price will drop until equilibrium is again reached.

  • Thank you for your answer :) But i really still don't understand :/ I think you are saying that the price would go up as long as there is still this (aggressive) buying pressure even with more seller ? – james Apr 18 '20 at 12:55
  • Quote is: $279.15 x $279.30 with a size of 7x2 The size means that there are 200 shares being offered for sale at $279.30 and 700 shares being bid for at $279.15. Six sellers of 100 shares now place orders, willing to sell at $279.15 has the same effect as one seller of 600 shares at $279.15. The number of sellers is irrelevant. It's the aggregate selling volume (the total number of shares) that results in transactions. After the 600 shares are executed and assuming no new players show up with orders at current price, the quote becomes $279.15 x $279.30 with a size of 1x2 – Bob Baerker Apr 18 '20 at 13:27
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You are falling for the common misconception that prices are 'controlled' by someone or something, or 'actively acting' in some way.

Prices are exclusively after-the-fact information, once a sale completed. There is no price without a sale being completed, and the price does not 'change' because someone is agressive or not. The price is always the last successful sale that happened, meaning that a buyer and a seller agreed on a price (and number of shares).
No matter how many buyer want to aggressively buy, if there is no seller, nothing gets sold, and therefore the price = 'last reported sale' is not changjng.

  • Thank you, I was talking in the case where you have a seller. I have always wonder, imagine i want to buy a stock which ask price is 50. If i have 10 dollars i can buy 0.2. But if i say that i want to buy only 0,02 then what will happen on the price ? Can it immediatly rise or crash even with lower buyer volume than seller ? Thank you :) – james Apr 18 '20 at 13:09

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