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Anonymous
What does it mean when some one says that today there was a net selling or buying of a stock. What does it mean because for every selling there is also a buying going on then how can you determine a selling or buying ?
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Chris
22 May 2021
Owner and Writer at Tortoisemoney.com
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Generally, I interpret this as net buying meaning that there are more buyers/ stronger buyers which causes price to rise and for net selling to mean that there are more sellers/ stronger sellers, causing price to fall.
This is possible because, for every stock, there are plenty of buyers and sellers on either side of the spot price, waiting to get their orders filled. As such, an imbalance in these numbers or their strength will cause price movements in certain directions.
For example, if there are 100 buyers but only 10 sellers of a particular stock, buyers will be eager to match the price of the sellers (ask-price) in order to ensure that they can get the shares they want. This hence pushes the price up and other buyers will also rush to get the shares from the remaining sellers.