Price Movements?

MistakesWereMade

Junior member
47 2
Lets say a big news event happens what exactly drives the price up or down?

Cause it doesn't make any sense that anyone would wanna sell shares when a company beats estimates by a huge margin. Everyone would be hoarding their shares instead of selling or buying more, there should be nobody stupid enough to be on the receiving end.

Is it the mm's that are obligated to drive the prices in these scenarios when nobody else is willing too?
 

ACstudio

Active member
138 14
Lets say a big news event happens what exactly drives the price up or down?

Cause it doesn't make any sense that anyone would wanna sell shares when a company beats estimates by a huge margin. Everyone would be hoarding their shares instead of selling or buying more, there should be nobody stupid enough to be on the receiving end.

Is it the market makers obligated to drive the prices in these scenarios when nobody else is willing too?

The obvious answer is "supply/demand".

But when you see selling into good news? ....Imagine if you were holding 100mil$ worth of XYZ and it was currently profitable and you wanted out to take profits....but the average daily volume was only about 20mil$ worth of shares. If you tried to unload them on the open market on a regular day you are not going to have the buyers to support the price and you will be forced to sell for lower and lower prices until your done. But if you wait for a binary event that creates a surplus of buyers...then what better time to unload those shares into the buying pressure. (buy into weakness/sell into strength)

Remember the run-up on TLT the other morning. That was mostly one group trying to cover a huge short position all at once for whatever reason...creating a bit of a short squeeze causing other shorts to cover and basically sellers just stepped aside and let it run. Nobody knows who it was to my knowledge but it was painful to watch.
 
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