a few questions.

[wtf_albino]

1) on Yahoo! Finance, I always see two quotes. One is the "Real-time" quote and the "Last-trade" quote. What is the difference between these two?


2) How exactly are stocks priced? (Explain the supply/demand behind it)


3) What causes gap ups and downs?

thanks!

[aiki14]

1) on Yahoo! Finance, I always see two quotes. One is the "Real-time" quote and the "Last-trade" quote. What is the difference between these two?


2) How exactly are stocks priced? (Explain the supply/demand behind it)


3) What causes gap ups and downs?

thanks!

1) I can only guess since I don't use Yahoo! Finance, but I would guess real time is during market hours and Last trade is outside of trading hours.

2) Initially they are offered at a price agreed upon by the offering syndicate, then price is simple bid and offer, if someone has a 1000 share lot for offer at 10 but there are only 500 willing to buy at that price, the price will drop to the next bid 9.99, If there are 1500 buying at the offer the price will rise to the next offer 10.01.

3) During the time between sessions events occur that influence the price at which folk are willing to trade the stock. Market makers arrange for an opening deal before the open and the bid/ask process begins from that point.

[Albert0373]

Real-time is as it is, the quote for that instant.

The Last-trade quote is delayed 15min.

[Bolimomo]

3) What causes gap ups and downs?

This is such a broad-based question.

Usually the most popular/liquid stocks gap up/down in sympathy with the market (S&P, Dow).

But individual stocks also gap up/down due to new releases about the company - usually earning release, or some significant news about the company.

e.g. RIMM this morning opened at 60.00 with a 12.00 gap up. Earning released yesterday after market closed.

The conditions affecting the company's fundamentals do not change overnight. People's perception about the company's ability to earn in the future can change very quickly. Price is all driven by supply and demand.

[wtf_albino]

thanks a lot for the clarification 8)