Stock Buying / Selling?

Answers:1   |   LastUpdateAt:2012-10-12 10:41:02  

Question
tomilola
Asked at 2012-09-12 10:27:03
I realized that when a company falls as 3% , the volume is very low .. MedlinePlus My question is how come the company lost 3% of its market capitalization in a very low volume ? MedlinePlus I have no example at this time , but I realized many times. MedlinePlus OK , I remember yesterday I read a story about the stock market that the value of shares traded was $ 1 billion , however , the market capitalization of global companies increased by $ 5 billion .. How did this happen ? I mean investors buy / sell shares worth $ 1 billion , with the market earned revenues of $ 5000 .. MedlinePlus that is confusing and strange Can someone please explain with examples .. MedlinePlus thank you very much
Answer1PurpleroseAnswered at 2012-10-12 10:39:30
Trading volume mostly depends on liquidity. If liquidity is high , the volume of trade is also high . If trading volume is very low , then spread between buying and selling prices (bid - ask spread ) can be very high . MedlinePlus For example , some populations developed in Ukraine or other market may have bid- ask spread up to 20% ! And they do not trade every day so you can easily win or lose 20 % per day in the stock price and market capitalization , market capitalization but not always equal to the market value .
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