what is meant by supply and stock
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[Really simple answer that anyone can understand]
Stocks are valued depending on the willingness of both:
Buyers - to buy at a specific price
Sellers - to sell at a specific price.
Demand can gyrate based on market dynamics, economic conditions, changes to central bank policy and better-than-expected results.
E.g. If the Company A is performing better than expected, it creates more demand for stocks in anticipation of better earnings.
Buyers - Create demand for the stock at their ideal price.
Sellers - Supply the stock at their ideal price.
CONCLUSION: It is a tradeoff on what investors think the company is worth at a given point in time.
supply 1: every company or financial instrument has a limited amount of existing stocks. companies usually keep a % of stocks, the rest is in the market. held by private investors or funds.
supply 2: this is , stocks that are in the hands of investors
demand: demand can be measured in the volume of transactions. but generally speaking demand affect stock prices, on the way up when buyers are eager to get the stock , so they out bid other potential buyers, which is good for supply 2 and supply 1 (remember, they also have theyr own stock most of the time).
on the way down if the holders are desperate to get rid of the stocks they have, potential investors have no incentive to pay more than the actual value so for the deal to get done price has to go down.
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Supply (economics) ... Difference between stock and supply: Stock is the total amount of the commodity available with the producer. Supply is the only part of total stock which producers are willing to bring into the market and offer sale at particular price.
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