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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
The relationship between how much is available (supply) and how much people want (demand).
Why It Matters
Supply and demand is the fundamental force behind every stock price. More buyers than sellers = price goes up. More sellers than buyers = price goes down. It's that simple. Earnings, news, and sentiment all work by shifting supply and demand - there's no other mechanism.
Key Points
- Stock prices move because of buy/sell imbalances, not intrinsic value changes
- Limited supply (low float) + high demand = rapid price increases
- IPOs, insider selling, and share offerings all affect supply
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How Stock Prices Work
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Common Questions
The relationship between how much is available (supply) and how much people want (demand). Supply and demand is the fundamental force behind every stock price. More buyers than sellers = price goes up.
Supply and demand is the fundamental force behind every stock price. More buyers than sellers = price goes up. More sellers than buyers = price goes down. It's that simple. Earnings, news, and sentiment all work by shifting supply and demand - there's no other mechanism.
Stock prices move because of buy/sell imbalances, not intrinsic value changes
Limited supply (low float) + high demand = rapid price increases
IPOs, insider selling, and share offerings all affect supply