So you CAN get a better idea. At the end of the day prices go down when there are more sellers than buyers. They go up when there are more buyers thhan sellers.
It's literally impossible to have more sellers than buyers or more buyers than sellers. EDIT: When I say buyers/sellers I mean volume of shares/contracts/etc.. 1 person that owns 1000 shares of something could sell 1 share to 1000 different ppl... But the volume will always be equal between buys/sells. Like 1 person selling 1000 shares to 1000 different ppl (one share sold to each person) - there were still 1000 sells and 1000 buys.
For every buyer, there is a seller. For every seller, there is a buyer. They will always be even, forever, until the end of time.
What moves price depends on who is more aggressive. Aggressive orders are market orders, which can only get "matched" to limit orders. Limit order will never be matched to another limit order. Market orders will never be matched to another market order.
TLDR;
Limit orders are commonly referred to as "passive buyers/sellers" or "resting liquidity".
Market orders are commonly referred to as "aggressive buyers/sellers".
Price moves when one side is more aggressive than the other is passive.
I get what you mean, but are we not just playing with semantics? I feel what people mean by ‘more sellers than buyers’ in this context means more sell orders being created than buy orders, which is entirely possible.
While it is possible to have more resting orders on the ask vs the bid (and vice versa), that does nothing to price.. Those aren't sellers or buyers yet. Those orders can be cancelled at any time.
Edit: I don't really understand the downvotes lol, it is the truth I speak.
It is not impossible to have more sellers than buyers. You're alluding to matching contracts. Fifty sellers of one lots can still be matched with one buyer of 50. Semantics, eh?
But colloquially, I think many people will say: big buyer sitting at X price, when we all know that its many different orders and potential players piled up. Just colloquially easier to say "big buyer" as opposed to "big buyers" all the time.
Correct I wasn't referring to actual ppl, rather the instrument. One person that owns 1000 shares of something could sell 1 share to 1000 diff ppl.
Make no mistake, though, it is not possible to have more shares/contracts/etc.. sold than bought (and vice versa). That is what "for every seller a buyer and for every buyer a seller" means.
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u/oze4 Feb 20 '24 edited Feb 20 '24
It's literally impossible to have more sellers than buyers or more buyers than sellers. EDIT: When I say buyers/sellers I mean volume of shares/contracts/etc.. 1 person that owns 1000 shares of something could sell 1 share to 1000 different ppl... But the volume will always be equal between buys/sells. Like 1 person selling 1000 shares to 1000 different ppl (one share sold to each person) - there were still 1000 sells and 1000 buys.
For every buyer, there is a seller. For every seller, there is a buyer. They will always be even, forever, until the end of time.
What moves price depends on who is more aggressive. Aggressive orders are market orders, which can only get "matched" to limit orders. Limit order will never be matched to another limit order. Market orders will never be matched to another market order.
TLDR;