Why do stock prices change on the stock market?

Every beginner and sometimes even an experienced stockbroker involuntarily thinks, but what is the reason for the change of stock quotes on the stock market? These reasons are not always obvious. Some people think that chaos rules the stock exchange, others think that there is a main "puppeteer" or "insider" in the market, and it is he who changes prices.

We prefer the explanation offered by classical economic theory: quotes are influenced by the decisions to buy or sell an asset by thousands or even millions of individuals, businesses, banks, other financial institutions and nations.

Everyone has different reasons for making stock trades:

Naturally, there are many other individual and collective reasons. But these are all reasons for market subjects to buy and sell.

The first assumption is that stock market prices rise when there are more buyers of stocks and fall when there are more sellers. Still, this is not entirely true. Any transaction is an agreement between buyer and seller.

Stock prices are falling because more sellers want to sell now and don't want to wait. Assets are rising because buyers prefer to buy now, rather than wait for a more attractive price.

It can be a voluntary decision of investors under the influence of incoming information or simply on expectations. It can also be a forced situation due to stop-losses or forced closing of positions.

Below we give the factors that can lead to changes in the quotations in certain assets, in addition to the factors mentioned above.

The price may be altered by exacerbated issuer risks. Many global financial experts warn that the bursting of the ETF bubble due to bad faith actions by issuers around the world leading to their insecurity could be the cause of the next financial crisis.

The stock market is influenced by various factors. One way or another, they affect supply and demand in the market, which is reflected in the value of assets. It is important for investors and stockbrokers to understand what kind of events can affect the stock price. Based on this, they make forecasts and investment strategies.