/biz/ - Business & Finance

[Anonymous No.53579988]

Okay, maybe /biz/ can answer, because every single person I ask always gives me a vague non-answer. Let's see if this board is filled with sheep as well, and I'm fucking getting pissed off I can't find the answer.

My question is, "What determines a stock's price?"

Now, every single person I ask, and every answer I research, always boils down to, "Supply and demand," "Market sentiment," and, "No one."

When I follow up with, "So who is listing the price?" I always get blanks stares or they get super defense (like wtf why) and say, "What the fuck does it matter?" What is this NPC bullshit? No one thought to ask?

No answer, so far, makes sense. Someone, or SOMETHING, is adding up those prices and listing them. There is either a mechanism or person involved. I want to know who, or what, and by what formula (and not some stupidly vague bullshit, the exact formula), they use to calculate and their standards for displaying it in real time.

Can someone, for the love of God, answer these questions?

[Anonymous No.53580012]

>>53579988
Market makers. They have built systems that accept buy and sell orders. This system matches buyers and sellers and the market maker takes a cut of the spread. This is called arbitrage.

[Anonymous No.53580016]

>>53579988
buy and sell orders you idiot

[Anonymous No.53580046]

>>53579988
here you go faggot

but its actually supply and demand

[Anonymous No.53580047]

>>53580012
this for us stocks is basically citadel
yes they cheat both buyers and sellers out of a percentage

[Anonymous No.53580057]

>>53580012
>>53580046
>>53580047
Why is 4chan literally the only place I get get answers? jfc The future sucks.

>>53580016
Then there's this faggot.

[Anonymous No.53580059]

>>53579988
when you buy you put a buy price.
when you sell you put a sell price.

When these two match you have a sale. That simple

Why do people put $x as buy or sell price? idk why do people sell and buy houses for millions of dollars, you tell me

[Anonymous No.53580076]

>>53580057
>Why is 4chan literally the only place I get get answers?
probably because they dont buy shares or didnt realise how literal your question was

[Anonymous No.53580079]

>>53580012
We know what their formula are? Or do they keep that shit in the dark?

[Anonymous No.53580093]

>>53579988
>,"So who is listing the price?" I
Market makers but also normal people who buy and sell.
For each stock there is an order book with everybody's buy and sell orders.
Market makers even put orders on both sides of the book. Normal people usually just on one side.
If someone wants to buy a stock and just does an unconditional buy order he first gets matched with the cheapest seller, then the second cheapest and so on.
The last price that a buy or sell took place is the stock price.

[Anonymous No.53580105]

>>53580079
In the dark for sure. Like I said, they make money from arbitrage. Ultimately you are choosing what price you want to buy or sell at though. You can put in any bid you want, it's just a question of whether you'll be filled.

It's the difference between market buying and using limit orders.

[Anonymous No.53580113]

>>53580076
Yeah, I don't get it. I can rephrase it any number of ways and ask for specific names or whatever, and I keep getting the same blank stare. I'm beginning to think people are drugged or some shit. Like, they never thought to ask.

>>53580105
Well, I want to do my best to also predict. So I want to know everyone who is involved and what their motivations are.

[Anonymous No.53580118]

>>53580046
Good luck pricing stocks with this lol
Better use discounted Cashflow model or some multiple.

[Anonymous No.53580150]

>>53580113
desu ur question is quite trivial and it takes about 20seconds to find the answer using google. u might wanna stay out of markets friend

[Anonymous No.53580161]

>>53580150
Yeah, well, you can try it any time you want. Type, "Who sets the market price," and you'll never once find the answer "Market makers," or, "Citadel."

[Anonymous No.53580180]

>>53580113
>Well, I want to do my best to also predict. So I want to know everyone who is involved and what their motivations are.

this is really hard. In physics, people study "complex systems". These are systems which principally can be described by simple laws and patterns, but when you have 1000s or 1000000s of agents or particles or whatever, the behaviour supersedes what you'd expect for a small number of actors. Think the brain, where we can understand neurons but no idea where intelligence comes from.

The stock market is like this. Best to study macro behaviours rather than focus on individuals. Unless you study the behaviours of market setters or big firms.

[Anonymous No.53580189]

>>53580161
another fun fact about the stock market is that nobody technically owns stocks, since the late 1990s they are all owned by a company that is located in the DTCC office in New York City called Cede and Company (aka Sneeds Cede and Feed)

[Anonymous No.53580190]

>>53580180
>supersedes what you'd expect for a small number of actors.
this is called emergent phenomena

like how quantum systems on a large scale somehow decohere and become classical

[Anonymous No.53580222]

>>53580057
>Why is 4chan literally the only place I get get answers
because we are all anti social autists here that hate the current system
well the system itself is a complex and hidden machine, most people with intimate knowledge of its inner workings are simply in on the scam and talking in the open about the details of the scam are a dangerous activity
thats why an anon board like 4chan is required for communication on this level, in any instance where i could be doxed i would feign ignorance at your question or give the normie tier answer too op
learn to social setting

>>53580093
>retail buys
this is the lie they tell you for stonks there is no borker that directly lists retail buys to sells, it all cycles through internal darkpools that run on very guarded formulas to answer the other anons question, nobody that knows will give you the details of set formula
even in crypto almost all exchanges work in a similar fashion of note only coinmetro is a direct matching engine that allows retail to buy and sell directly into itself

to put this in simple practice terms if retail puts in a buy order then the market marker buys up the cheapest available packet of stocks and relists it to the buy order at a slightly higher price to make their bottom line, there is always at least 1 middleman retail cannot exchange directly
think this is a joke, you can fuck their algos via spoofing orders for instance putting in a large buy order and cancelling in before completion while really trying to sell, so you gain from their manipulation at the MM detriment
guess which two of these things is illegal with jail time and which is business as usual to know whats what

also fun but little known fact in almost every western jurisdiction the stocks you hold at a broker are about as fake paper promise as the btc on ftx
the stocks remain at all times the legal property of the broker and if they blow themselves up on a leveraged trade your stocks get stolen to pay their debt off

[Anonymous No.53580255]

The price is just an unbiased estimator of the discounted free cash flows to equity investors.

[Anonymous No.53580281]

>>53580222
>legal property of the broker and if they blow themselves up on a leveraged trade your stocks get stolen to pay their debt off

wtf is this real? How is this not illegal. Then why are we so pissy about ftx then

[Anonymous No.53580288]

>>53579988

There are 2 people in the market. They each have 1 share of a company, with only 2 outstanding shares.

The Ask price is $3 (what the seller wants).
The Bid price is $1 (what the buyer wants to pay).
The market price is $2.

[Anonymous No.53580308]

>>53580281
its exactly the same on coinbase for instance
why isnt this illegal, lol anon laws are there to predict the elite from underclass competition not the other way around

this btw is also why crypto is so important, self custody is a build in feature of the network and this is also way the usual suspects rage and seethe so hard against what they call self custody wallets, no they are regular wallets
just wait when normie owned corns are a thing of the past and withdrawl into your own wallet is illegal for non accredited investors, you know its coming

[Anonymous No.53580320]

The listed price is just the last price the asset was traded for. What I can't figure out is what price the asset trades at when there's a spread between the bid and the ask. For example, say I say I'm selling a stock for $10 or more and a buyer says they'll buy the stock for $20 or less. What price does the trade execute at?

[Anonymous No.53580343]

>>53579988
Last price a buy was filled at. That said price discovery is fucked with so market makers can get a slice by providing liquidity.

[Anonymous No.53580349]

>>53580320
thats easy anon, MM or any arbitrageur buys your stock for 10 and sells it for 20 to the other party, such a situation rarely occurs
i think you mean the opposite, you list a sell for 20 and the buyer lists a buy for 10
in that case you dont get an exchange but the spread is 10
in the end dont bother too much about it most of this is all algo and the deviation on liquid stuff is really too small to really impact a retail traders bottom line

[Anonymous No.53580358]

>>53580281
>wtf is this real?
It isn't, customers and brokers assets are kept separate under SIPA for that reason and touching them is a criminal act.

[Anonymous No.53580369]

>>53580320

Market price is determined by limit orders. If you set a limit sell below the market price, the stock is sold at the market price, not at your limit sell. Just like how I've set limit buys at $5.50 a share, but actually got the share at $5.20 because the market price tanked when the market was closed.

If you buy a stock at the market price, you pay the "listed" price. See >>53580288 if they both have limit buy/sell orders set, this is what would happen to the market price.

[Anonymous No.53580386]

>>53580358
you are gonna be in for a surprise
do note they cant do this all the time, but in the case of a broker bankruptcy the actual holders of the stocks are pretty far down the line of ownership
for you see if the holder losses his stock that sucks but doesnt impact the orderly market
if for instance the failed claims move up in the other direction to who knows where you get to a situation of total market failure to execute any exchange

[Anonymous No.53580400]

>>53580308
>why isnt this illegal
It is illegal, it's a direct violation of SIPA.

[Anonymous No.53580430]

>>53580400
>It is illegal, it's a direct violation of SIPA.
lol, lmao even
here is a bloomberg since i dont care enough to browse through coinbase owns documents to where exactly it is
https://www.bloomberg.com/news/articles/2022-05-11/coinbase-gives-256-billion-reminder-about-agonies-of-bankruptcy

[Anonymous No.53580469]

>>53580430
https://www.sec.gov/about/laws/sipa70.pdf
This is about registered SIPC compliant broker dealers not CEX scams. Read sections 3- 8 There's more about the penalties to anyone who violates that in section 14.

[Anonymous No.53580480]

>>53580386
>but in the case of a broker bankruptcy the actual holders of the stocks are pretty far down the line of ownership
They're not, it's illegal for a broker or trustee to use customer's assets against the debt of the broker.

[Anonymous No.53580544]

https://en.m.wikipedia.org/wiki/Issuer

[Anonymous No.53580627]

>>53580180
I'm okay with it being hard. I'm not even looking for a perfect score. Just 30% and pick up the occasional 1:5 to 1:10 success.

[Anonymous No.53580686]

>>53580627
read Trading and Exchanges by Larry harris
its not really a trading book, and its a bit dated, but it explains really well what "the market" is, who participates for why, how etc..
you can find it on libgen

[Anonymous No.53580747]

>>53580686
>read Trading and Exchanges by Larry harris
which pdf is the right one?

[Anonymous No.53580864]

>>53580747
wait forgot to upload picrel