I have no background in the stock market and I have just started to learn about it. Please excuse me if this is a stupid question.
What I know so far is that if I have to sell a share, there has to be a buyer in the market. If no one is willing to buy a share, I cannot sell it.
My question is that suppose there was sudden bad news for company ABC. Everyone is expecting that this company may lose 50% of it's share value. People who own ABC's shares will want to sell their shares. Now, in order to sell the shares, there has to be someone who is willing to buy them.
From what I presume how it works is that someone puts a sell request and someone at the same time who puts a buy request can exchange hands. Then how does the market know that there are a lot of sellers and no buyers?
Is there like a pool where you see that people have put a selling request and no one has put a buying request? Because if there is a pool, it makes sense that supply and demand can be calculated. Otherwise, if there is no pool, how do we know if there is more supply of a share than the demand and vice versa?
Once again, please excuse me for this question, but I am very confused about how this works.