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Let us assume there is a listed company x. Currently it has 100 shares issued to trade in free float market. Current price of stock is let say 10. Now please let me know if I purchase one share of company x at the market price of 10. How it will effect the stock price. And please add and exemplify some other scenarios whichever you find good to explain more. For more information let say promoters of the company holds 100 shares with them like 50% of the company is with promoters and the other half is with people who invest or trade in that company. If I've missed to tell or assume any other vital info. needed please assume it yourself while mentioning it. Thank You

Jainav
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    Hypothetical scenarios like this have no relationship to how stock markets work and how stock market prices change. – Bob Baerker Apr 10 '21 at 14:38
  • "Another assumption would be that every order will be executed on market price" Where does this market price come from? By "market price", are you referring to the price of the most recent trade (i.e the "last trade" price)? – Flux Apr 10 '21 at 15:13
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    The "bid" and "ask" prices are how the price of a stock changes. See https://money.stackexchange.com/questions/1063/can-someone-explain-a-stocks-bid-vs-ask-price-relative-to-current-price/1065#1065 – Chris W. Rea Apr 10 '21 at 19:50
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    "Another assumption would be that every order will be executed on market price. There is no option for bid and ask or any limit order." – That assumption is simply false, and makes the question meaningless. It's like asking, "How do airplanes stay up, if we make the assumption that airplanes don't have wings?" Well, airplanes do have wings, and those wings are how an airplane stays up. Likewise, the stock market does have limit orders, and those limit orders are how the pricing system works. – Tanner Swett Apr 11 '21 at 01:03
  • There's an explanation at How is stock price determined? and many other related questions on the site you can search through. – Chris W. Rea Apr 11 '21 at 12:41

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Another assumption would be that every order will be executed on market price.

The market price is the price at which orders are executed. It looks like I've simply stated the same thing the other way round, but the difference is important.

If you buy a share for $10, then the market price must be $10. If, an hour later, somebody pays $11 for one share, then the market price is now $11.

There is nobody deciding what the market price should be. Instead, there are people offering to sell shares, and people wanting to buy them. If they can agree on a price, then the shares get sold, and that is now the market price, up until somebody else makes another trade.

Simon B
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  • This takes the buyer as an exemple. But if everyone only want to buy at the price of $9. What decides the stock price go down? – Thanh Trung Nov 04 '22 at 13:10
  • @ThanhTrung It's only when a trade happens that the price is set. It doesn't matter how many people are asking to buy at some price if nobody is willing to sell. I can't crash the price of Apple by offering $1 per share, because nobody would be stupid enough to sell to me at that price. – Simon B Nov 04 '22 at 15:08
  • so if everyone is asking $9 but someone is stupid or need money and sell for $5. Then what would be the new stock price if the order is executed? 5 or 9? – Thanh Trung Nov 04 '22 at 16:21
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    @ThanhTrung If people are bidding $9, then selling for $5 would be a mistake. A market maker wouldn't normally allow that to go through. But if it did, then the market price would be $5, until the next trade. – Simon B Nov 04 '22 at 16:42