re: **OT**
>>> You have an asset,
There is supply and demand.
if supply is greater than demand the price will fall.
If demand is greater than supply then the price will rise.<<<
Ken,
You put in your order, and it is exicuted. Reason there is a flowing supply and demand at that price level.
Think of supply as a river flowing, and that river is flowing into a lake with a hydro electric plant in the Damn. The output of the plant, electricity, is demand. As demand increases, they have to let more water flow through the plant. The level of the lake is inversely related to price. The level of the lake goes up means the price goes down. If the damn overflows, then the price will gap down. In Yhoo's case, they were generating power before the river started flowing gaping prices higher.
During market hours, the plant is always producing, and the river is always flowing, and in normal conditions, the level in the lake is stable.
Once you buy stock or production, you become water vapor that can form a cloud that can rain on the river.
Then a cloud becomes a big storm and it rains up stream, That would represent A big seller. Now the Market makers, the guys that run the plant, might see it coming and try to find a buyer, find a place to put the extra production. If they don't, the lake will fill up and the price will go down. If the lake over flows the dam, the price will fall very fast.
The other Side, a big buyer showes up, Wants a lot of production from the plant. well the river is flowing, but not enough to make up for the needed demand so the level of the lake falls, the price goes up. In the case of YHOO, there is no water left in the lake and any production causes a big change in the lake. Now they might be able to find a big storage tank upstream and convince the owner of the water in the tank that he does not want it and get him to dump it into the river. If that happens, then the plant producers could maintain the level in the lake. Cross the big block.
The size of the lake represents the market cap or the float out there.
GE would be lake Superior. Yhoo would be the fountain infront of your local bank.
With this analogy, you can see how proportional and continuous every thing is. some days it is cloudy but does not rain, other days it is sunny and there are no clouds to rain on the river. Other days all it does is rain and the lake over flows.
Your trade just may not be enough to upset the ballance.
Jim
PS,
Megan is doing well, but it looks like she may stay at the Hospital for a few more weeks. We are expecting her home by August. |
