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.

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200
votes
13answers
53k 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 ...
157
votes
3answers
646k 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 ...
38
votes
3answers
10k 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 ...
42
votes
9answers
22k 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,...
106
votes
7answers
26k 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 ...
12
votes
4answers
52k 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 ...
24
votes
2answers
47k 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 ...
8
votes
1answer
2k 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 ...
8
votes
1answer
377 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?
22
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 ...
66
votes
3answers
15k 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 ...
236
votes
21answers
78k 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 ...
8
votes
4answers
2k views

Does a stock really dip in price on the ex-dividend date? And why would it do this?

As per this Investopedia article: Because the stock price is expected to drop by the amount of the dividend on the ex-dividend date, Why is a stock expected to fall on the dividend date? Does it ...
155
votes
10answers
34k 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 "...
41
votes
10answers
44k 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?
80
votes
10answers
20k 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 ...
8
votes
4answers
5k 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 ...
21
votes
5answers
5k views

What is insider trading exactly?

I know that insider trading is illegal. However, is it true that the CEO of a listed company can still buy/sell their own stock? If he/she does so, isn't that technically insider trading? Or why is it ...
8
votes
2answers
9k views

What happens to options held during a reverse stock split?

I held 1 put option for 100 shares of USO that expires on May 8. Yesterday, USO underwent an 8:1 reverse stock split. My options are now for USO1 instead of USO, but what does that mean? The strike ...
12
votes
4answers
25k 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 ...
22
votes
8answers
3k views

How do I get into investing in stocks?

How do I get into investing in stocks?
20
votes
3answers
95k views

What typically happens to unvested stock during an acquisition?

I work for a publicly traded company that was acquired by another publicly traded company. I also own shares of "restricted stock units" for my company. All of my shares are scheduled to vest far ...
21
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 ...
38
votes
7answers
10k 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 ...
8
votes
4answers
14k views

When am I entitled to participate in a stock split? — record date, split date, ex date

Stock split announcements usually mention a few dates — record date ("date of record"), split date ("distribution date", "pay date", or "payment date"), ex date ...
6
votes
2answers
1k 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 ...
23
votes
7answers
16k 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 ...
12
votes
10answers
9k 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 ...
34
votes
10answers
9k views

Why do people claim that it's hard to outperform the S&P 500? It has only increased in value by ~1.5x in the past 5 years

Whereas companies like Google, Facebook, Netflix, Amazon, Apple have all increased anywhere from 3x-6x in value in the past 5 years. If you just stuck with those companies, you would have easily ...
36
votes
10answers
9k 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 ...
22
votes
10answers
10k views

Why do investors pay trillions for minority stakes in companies, when their only potential payback is modest uncertain dividends? [duplicate]

I'm struggling to understand the core reason to invest in stocks as a minority shareholder. Majority shareholding makes more sense as you effectively control the company, so you can pay yourself ...
22
votes
5answers
20k views

Do stock prices drop due to dividends?

From Personal Finance for Dummies, page 209: Dividends Dividends are income paid by investments. Both bond funds and stocks can pay dividends. Bond fund dividends (the interest paid by the ...
9
votes
2answers
5k 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 ...
7
votes
1answer
588 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 ...
6
votes
2answers
783 views

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

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?
10
votes
5answers
1k views

Why is a stock that pays a dividend preferrable to one that doesn't?

I understand that a dividend is a way for a company to return money to shareholders. But I'm not quite understanding why it is preferable to capital appreciation and putting the money to work ...
110
votes
12answers
104k 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 ...
66
votes
11answers
14k 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 ...
62
votes
4answers
128k views

How does a public company issue new shares without diluting the value held by existing shareholders?

When a public company issues new shares, the total number of shares traded in a secondary market goes up. Assuming there is no change in the fundamentals of the company and the profitability, I would ...
110
votes
10answers
14k views

Why should we expect stocks to go up in the long term?

I have read in many personal finance books that stocks are a great investment for the long term, because on average they go up 5-7% every year. This has been true for the last 100 years for the S&...
17
votes
6answers
2k views

How to evaluate stocks? e.g. Whether some stock is cheap or expensive?

What kind of information do you obtain before buying (or selling) a stock? I know the PE ratio is very important, but not the only thing. Are there any rules of thumb to determine whether some stock ...
45
votes
18answers
18k views

I carelessly invested in a stock on a spike near the peak price. How can I salvage my investment?

I carelessly invested on stock on a spike (I have been persuaded by a family member) and now my investment value is really low, as you can see below. Is there anyway to salvage my investment for ...
29
votes
7answers
3k 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 ...
19
votes
10answers
27k views

Is the stock market a zero-sum game?

In the stock market, over both the short and long-term, does someone necessary need to lose in order for someone else to make a profit? If not, then more fundamentally does something — in the most ...
41
votes
4answers
80k views

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

When a stock price rises, does the company get more money?
26
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 ...
24
votes
3answers
7k 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 ...
37
votes
9answers
17k views

Is it legal to “mine” dividends?

Dividends are paid to share holders based on ownership of shares before the “ex-dividends” date. Example: Stock A has an ex-date of July 1st Stock B has an ex-date of July 15th Stock C has an ex-date ...
11
votes
4answers
20k views

Company stock listed in multiple exchanges?

Some companies apparently have their shares listed in multiple exchanges. For example, I think that a company can be listed simultaneously in New York, London, and maybe even some Asian markets - is ...
11
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?

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