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Questions tagged [stocks]

This tag is to be used for any questions related to Stocks. Ideally they should be accompanied by a country tag if relevant. It is discouraged to ask question about a specific stock. However an example can be used to illustrate a point.

111
votes
3answers
430k views

Can someone explain a stock's “bid” vs. “ask” price relative to “current” price?

In my online brokerage account, I want to buy a particular stock and I see the following: Bid: 13.20 x200 Ask: 13.27 x1,000 the current stock price is 13.22. Can someone explain what ...
177
votes
13answers
43k views

Why would a company care about the price of its own shares in the stock market?

After a company has issues shares, why should it care if the value of the shares go up and down? Since the shares are now being traded among the public, if the value goes up or down, that is strictly ...
32
votes
3answers
7k views

Why does demand for stock rise when a company appears to have high future value?

So a company decides to raise money by selling shares of its stock. The stock is offered at an initial price of their determination. The stock is then traded in a market where forces of supply and ...
9
votes
1answer
1k views

What is the final price if the bid price exceeds the ask price in an order driven market? [duplicate]

Let's assume a very simplified situation. There is only one seller asking for 10$ and there is only one buyer bidding 20$. At what price would the transaction go? Some answers say it won't, because ...
23
votes
5answers
4k views

Book or web site resources for an absolute beginner to learn about stocks and investing? [closed]

I'm completely new to the world of investing and stocks. Knowing that I shouldn't invest or buy stocks until I know it well enough, I was wondering which cheap or affordable resources would be the ...
63
votes
3answers
14k views

How did this day trader lose so much?

I recently read this article about a day trader that lost $100,000: A trader started a GoFundMe page to pay back $100,000 to E-Trade after a disastrous short Please explain this, because I can not ...
30
votes
7answers
17k views

Why do people buy stocks that pay no dividend?

Before recently, Apple Inc. did not give dividend to shareholders. This makes me curious why people buy Apple Inc. stocks; while it might be due to the expectation of selling stocks at a higher price,...
93
votes
7answers
18k views

Why is stock dilution legal?

What I always heard, since I was a child, was that if you own a stock share, you actually own a small share of a company. That seems to be the general consensus of what a stock share is. Well, that ...
7
votes
1answer
296 views

Question about ex-dividend date timing

For example, if the ex-dividend date is next Monday, and I buy the stock on next Monday, would I get the dividend? Or would the person who sold the stock to me get the dividend?
11
votes
3answers
37k views

What does “more buyers than sellers” in technical analysis of stocks actually mean?

I often hear/read technical analysts looking at volume and price action on a chart and claiming that there are "more buyers than sellers" or vice versa. Since every trade requires a buyer and a ...
18
votes
2answers
34k views

How to find historical stock price for a de-listed or defunct company?

With services like Google Finance or Yahoo Finance it is very convenient to find the historical stock price metric of a listed company, but if the company is not listed, I can't find the data. For ...
6
votes
2answers
603 views

What price is a limit buy and a limit sell order settled at?

A market has an existing limit buy order at $1.00. The market then receives a limit sell order at $0.95, what price is the transaction settled at?
75
votes
10answers
12k views

Why does a company pay dividends at all?

If a company can lower the dividends and even stop paying them at all during hard times, why would they re-install them at all? If I understand correctly a company pays dividends so that investors ...
22
votes
8answers
3k views

How do I get into investing in stocks?

How do I get into investing in stocks?
10
votes
4answers
18k views

Can we estimate the impact of a large buy order on the share price?

What I am trying to understand is: If we know the number of shares a company trades and the current price of the share, can we estimate what volume of trade that is required to move the share price in ...
35
votes
7answers
9k views

Why is it rational to pay out a dividend?

Imagine a mature company, which has stable earnings and made a profit this year. The company is planing to pay out a part of this earnings to its shareholders. Assuming the stock price goes down ...
144
votes
10answers
30k views

Do I make money in the stock market from other people losing money?

Basically I am new to stock trading and neglect to see the differences between trading stocks and betting on sports. Basically I am "betting" on which company will do well, and this can change due to "...
22
votes
2answers
3k views

Mutual fund value went down, shares went up, no action taken by me

I have no prior experience with stocks so please forgive me if this is a dumb question but I don't even know what to try googling. Two days ago I signed up with scottrade. I put $1000 into ICENX ...
36
votes
10answers
8k views

Should a high-school student invest their (relative meager) savings?

I am a high school student, I don't really have much money, between one and two grand in my savings account. However, I have friends who are investing in both penny stocks and stocks. I do not really ...
9
votes
10answers
4k views

Does the stock market create any sort of value?

Sorry if the below seems like a conspiracy theory. It probably is, but I probably don't understand something. (This has bugged me to no end as long as I can remember.) Okay, so here is what I ...
7
votes
4answers
4k views

How is stock price determined?

Is stock price determined only by the last trade that takes place? For example, if a stock I own is trading at $3.42, and I place a Sell Limit order for $0.00, will the stock price temporarily dip to ...
5
votes
1answer
517 views

Wash sale rule + Mutual Funds/ETFs?

According to IRS rules, you can't sell a security, take a capital loss on your taxes, and then buy back the same or a "substantially identical" security within 30 days. However, "substantially ...
4
votes
1answer
268 views

How to automatically reinvest in non-dividend paying funds

I've read Einsteins quote stating "The most powerful force in the universe is compound interest." However, everywhere I read this is basically only possible with dividend paying stocks and then ...
198
votes
21answers
68k views

Why isn't everybody rich?

This question came up after reading this question (stock market long term risks), in which it is re-iterated (as it has been many times on this site), that investing in the stock market, especially an ...
104
votes
12answers
88k views

In the stock market, why is the “open” price value never the same as previous day's “close”?

This is something that is mind-boggling to me, and it is particularly obvious in candlestick graphs: Why is the open value never the same as the previous day's close value? This is something I just ...
38
votes
10answers
40k views

Options for dummies. Can you explain how puts & calls work, simply?

I never understood Puts or Calls. Could anybody explain it like I were a child?
23
votes
7answers
10k views

Is it true that 90% of investors lose their money?

Many investment gurus state that majority of investors fail and then offer a proven "[insert fancy name] investment strategy" that will make you successful. The number usually starts at 90% and often ...
30
votes
7answers
2k views

Shares; are they really only for the rich/investors?

I've always been under the impression, that if you want to be a player in the "shares game" you either have to be an full time investor, or someone who has a lot of money to play with. Is this true? ...
27
votes
7answers
8k views

What prevents investors from buying high yield stocks and selling them as soon as their dividend is paid out?

What prevents investors from buying high yield stocks and selling them as soon as their dividend is paid out? I guess I am confused: If you know the yield and when the dividend will be paid out, why ...
25
votes
4answers
10k views

What is the meaning of “short selling” or “going short” a stock?

Can someone please explain the meaning of 'shorting' a stock with an example?
26
votes
4answers
44k views

When a stock price rises, does the company get more money?

When a stock price rises, does the company get more money?
17
votes
3answers
2k views

Does investing in a company support it?

I ask this question in the context of investing in "ethical" companies, as someone I know wants to do in order to support them. My understanding is that when you buy stock, you're just exchanging ...
9
votes
2answers
1k views

How can I purchase Skype stock during the IPO?

Skype will be going IPO soon. How can I purchase their IPO stock?
4
votes
1answer
421 views

Indian Demat account

I just converted my savings account to NRO and created a new NRE account. Now the bank is asking me to convert my demat to NRO demat where I need to close my exising demat account and open a new NRO ...
17
votes
1answer
5k views

What is a stock split (reverse split)?

In the picture below, Citigroup's stock split 1 to 10. My guess is this means that everyone who had 1 share now has 10 shares? This can't be right though, because the value of the stock after the ...
10
votes
1answer
2k views

If a startup receives investment money, does the startup founder/owner actually gain anything?

I am a bit confused on this topic. You hear a lot of stories now on how startup X received X million dollar from X VC firm. But I'm unsure whether the owners of the startup are actually 'making money' ...
9
votes
2answers
24k views

What happens to public shareholders when a public stock goes private?

I feel like an idiot for buying ZNGA at $3/share. Now, there is talk of having the company go from public back to private? What does this mean for me as a public shareholder?
9
votes
3answers
2k views

Should I wait a few days to sell ESPP Stock?

I have read three other threads about employee stock purchase plans (I get to buy company stock at a 15% discount) and come to the conclusion that I should sell most of my shares immediately after ...
7
votes
1answer
2k views

For a single company listed in multiple exchanges in different countries, are the shares being offered the same?

For a given company ABC, which is listed in PSE, DEU and ASX. Are the shares being offered in DEU the same shares being offered in ASX and PSE? What's the difference if a person buys it in DEU versus ...
6
votes
2answers
4k views

How does the purchase of shares on the secondary market benefit the issuing company?

Purchasing common stock is often described as making an investment in the company. In exchange for this investment, you receive shares of the company's profits and, hopefully, you see some capital ...
3
votes
2answers
184 views

How to check I own a stock not involving a broker

I want to check whether stocks I bought with my online broker are really mine. Obviously I can use my broker's desktop application, web-site, or go to their office and ask. The question is: "Is ...
11
votes
5answers
8k views

What percentage of my portfolio should be in individual stocks?

It's easy to find guidelines for how much of my non-retirement portfolio should be in stocks as an asset class (i.e. via mutual funds) but I'm having trouble finding recommendations for how much ...
11
votes
2answers
509 views

What is the “Bernanke Twist” and “Operation Twist”? What exactly does it do?

I was reading the article Bernanke’s Twist Sharpens Year-End Anxiety Over Stimulus and In the article it says The Fed on June 20 extended its Operation Twist program to swap $267 billion in ...
7
votes
1answer
231 views

Why adjust for inflation annually, as opposed to realising it after the holding period?

Why do investors offset their annual returns against inflation, when inflation isn't realised until the end of the holding period (when the investor is actually spending the money)? An example: ...
5
votes
2answers
26k views

Do I have to pay a capital gains tax if I rebuy the same stock within 30 days?

My question is similar to this question except that I would be buying the same stock within the wash-rule period. If I sell a stock at a profit, and then use that money to re-purchase the same stock ...
5
votes
1answer
971 views

Are Investment Research websites worth their premiums?

There are websites that claim to own formulas that outperform the market. Examples of these websites are - Zacks Investment Research or Investors Business Daily. Each keep a list of equities that they ...
2
votes
2answers
145 views

How could strike price for new shares be higher than the market price

A company has made an application for new Ordinary Shares. The new Ordinary Shares will rank pari passu with the existing Ordinary Shares. Also the company issues Ordinary Shares in respect of the ...
1
vote
3answers
478 views

Can a wealthy investor invest in or make a deal with a company before it goes public / IPO?

Can a wealthy investor invest his money in any company before it goes public / IPO? I am referring to a recent Goldman Sachs and Facebook deal worth $450 Million at a valuation of $50 Billion dollars. ...
1
vote
6answers
269 views

Why do stock prices rise when dividends increase?

It seems like stock prices rise when dividends increase unexpectedly [possible citation needed]. This doesn't seem intuitive to me, because if you think of stock as a claim of ownership on a company, ...
58
votes
11answers
12k views

Stock market long term risks

This question has been spurred by the following question which was on the 'Hot Network Questions' Is it a lie that you can easily make money passively in the stock market? . The answers to that ...