A stock’s price moves up or down based on supply and demand in the market. If more people are buying (demand) than selling (supply), the price goes up. If more people are selling than buying, the price goes down.
Different types of orders traders place
- Market Orders vs. Limit Orders
- A stock price changes when transactions occur at different price levels.
- Buyers place limit orders at specific prices they’re willing to buy.
- Sellers place limit orders at prices they’re willing to sell.
- If a buyer places a market order (buying at any available price), they will match with the lowest-priced seller.
- Order Book and Price Movement
- The stock price moves when large enough market orders consume the available shares at a given price level.
- Example: If AAPL is at $200, and buyers quickly buy up all the shares available at $200.01, $200.02, $200.03… eventually reaching $205, the stock price will update to $205.
How Many Shares Need to Be Bought to Move AAPL to $205?
The number of shares required depends on the liquidity of the stock, which is based on:
- Order book depth: How many shares are available at each price level.
- Trading volume: AAPL is one of the most liquid stocks, meaning millions of shares are traded every minute.
- Market makers & algorithms: They can add or remove orders dynamically, affecting how fast the price moves.
For a liquid stock like AAPL:
- If there are 100,000 shares available at $200, and you buy all 100,000, the next available price might be $200.01.
- If you keep buying through all the sell orders up to $205, you might need millions of shares.
Real-World Example:
If 1,000 shares are available at each 1-cent increment from $200 to $205, you would need to buy: (5 / 0.01) * 1,000 = 500,000 shares to move AAPL from $200 to $205 in one go.
However, in reality:
High-frequency trading (HFT) and market makers will place new orders dynamically, so you might need millions of shares to push the price up by $5 in a short time.