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YOVIDAI Investing Companion
beginner 3 min read

How is a stock's price actually decided?

Not by any single person. By the balance of every buy and sell order.

There is no accountant somewhere deciding what a share should cost. The price on your screen is simply the last price at which a buyer and a seller agreed.

If more people want to buy Reliance today than sell it, the price ticks up until enough sellers are convinced. If more want to sell, the price ticks down.

News, quarterly results, budget decisions, oil prices, sector trends — all these change what buyers and sellers are willing to accept. That's why prices move every second the market is open.

Analogy: a fish market at 7am. If today's catch is small, the same fish costs more. If everyone brings their catch and few people show up, prices drop. Nobody controls the price — the crowd does.

Terms you'll see
  • BidThe highest price a buyer is willing to pay right now.
  • AskThe lowest price a seller will accept right now.
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