LemonTrades
TL;DR
- A stock’s price is simply the last price a buyer and a seller agreed on. Nobody sets it; the order book does.
- Prices rise when buyers are more eager than sellers, and fall when sellers are more eager.
- What changes their minds is news: earnings, interest rates, the economy and surprises. That’s why prices can jump in seconds.
- LemonTrades reads the news as it breaks and tells you which headline moved your stock, and why.
Tickers change price all day, but no one is typing in those numbers. Here’s what’s really happening.
The order book
Every stock has an order book: a list of buyers’ prices (bids) and sellers’ prices (asks). A trade happens when a buyer and a seller meet, and that trade becomes the new price.
| Bids (buyers) | Shares | Asks (sellers) | Shares |
|---|---|---|---|
| $99.98 | 500 | $100.02 | 300 |
| $99.97 | 1,200 | $100.03 | 900 |
| $99.95 | 2,000 | $100.05 | 1,500 |
In this example, the 4-cent gap is the spread. A buyer who wants shares now pays $100.02, and that’s the new price. If buyers keep taking the asks, the price climbs. If sellers keep hitting the bids, it falls.
How the open and close work
The NYSE and Nasdaq run auctions at the open and the close, matching as many orders as they can at one price. That’s why a stock can open far from where it closed: orders pile up overnight. See what time the stock market closes.
What makes buyers and sellers change their minds
- Earnings: results against what was expected. See the earnings calendar.
- Interest rates: higher rates make future profits worth less. See the 10-year Treasury yield.
- The economy: jobs, inflation and growth. See the economic calendar.
- Headlines: a contract, a lawsuit, a tariff. On November 5, 2026, fears of slower AI spending took Nvidia down 9.3%.
- Big investors and funds, whose orders can push a price by themselves.
Price vs value
A $500 stock isn’t necessarily more expensive than a $50 one. Investors compare the price with earnings. Market value is the price times the number of shares. The P/E ratio is the price divided by a year’s earnings per share: at $100 with $5 of earnings, the P/E is 20. See the Tesla P/E ratio for a high one. Splits change the price but not the value: see Nvidia’s stock splits.
Sources
Education, not financial advice. See our disclaimer.
