What causes stock prices to move up/down?


There are a couple of reasons behind why the stock market moves up and down.

  1. Investor Confidence – Stock prices move up and down depending on how confident investors are in a stock. This is often affected by earnings reports (how the company is financially performing) and the media around the stock.

  2. Bid/Ask Spread – The stock market is a live daily auction where stocks are bought and sold many times throughout the day. More experienced traders will set prices that they want to buy or sell a stock at, this is known as the Bid/Ask Spread (the difference between the lowest and highest buy/sell (bid/ask) price). Some traders that want to sell a stock quickly will reduce their asking price which affects the stock price and adds to a stocks volatility.

Please know, the value of investments can go up as well as down and you may receive back less than your original investment, meaning, when investing your capital is at risk.


Disclaimer: At Evarvest we believe in making investing and investment education more accessible, but we don’t provide investment advice and individual investors should make their own decisions. While we try our best, we cannot ensure the accuracy of the information we provide.

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