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I am relatively new to the stock market and might not know all the useful terminology, so bear with me as I will do my best to explain what I am trying to grasp and hopefully I will be able to learn what's actually happening in this scenario.

So let's say, a stock is trading at the price range from 1300 to 1400 on a specific day. Towards the end of the day, however not after close, you can see a mysterious dip in the price trendline of the stock - it is so sharp that it only is represented by a single price point, let's say at 400 for one time interval, and then it immediately goes back to the initial trading range.

What happens there? Does it mean that someone was lucky enough to fulfill a limit buy at such a low price, and in such big volume that whoever was selling the stock at the market price had to fulfill it as it was the only volume being traded, at "the market" - and therefore the limit buy had to be honoured?

I am at my wits here, especially since I dont know the name of it I am unable to find an image to attach, however I have often noticed it with TSLA, when there is literally a split second, enormous dip in the stock price for it to only go back to the same range it was trading before that.

If I see it next time I will definitely add it onto the post.

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This is possibly caused by bad data, which happens rather frequently. Have you checked against other data sources? Do other data sources also show similar dips?

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  • now that I looked at some comments under this post, it clearly makes sense that this happened due to the absence of data. Next time it happens, I will make sure to cross-reference that with another data source.
    – kiyanuDevs
    Aug 29 '20 at 4:11

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