Who puts out buy/sell orders during earnings reports or other scheduled relevant information?
The early bird catches the worm. The first person who makes use of the information gains! That is why hedge funds pay billions of dollars to place their routers right at the center of wall street. Moreover, the information is not always correct. The article you are reading may be a rumor spread by someone on wall street.Then there is speculation and that is factored into the price. For example:- In spite of all the bad news from Greece, the market still continued to rise. This was because, everyone had an idea about what was going to happen and the price was factored in way before Greece actually defaulted. The game is way more complicated than it seems. If everyone sat down and read reports, opportunities to make millions of dollars would have been lost in those few seconds. (Please note:- I do not mean reading reports is bad)
If you can afford the cost and risk of 100 shares of stock, then just sell a put option.  If you can only afford a few shares, you can still use the information the options market is trying to give you -- see below. A standing limit order to buy a stock is essentially a synthetic short put option position. [1]  So deciding on a stock limit order price is the same as valuing an option on that stock. Options (and standing limit orders) are hard to value, and the generally accepted math for doing so -- the Black-Scholes-Merton framework -- is also generally accepted to be wrong, because of black swans. So rather than calculate a stock buy limit price yourself, it's simpler to just sell a put at the put's own midpoint price, accepting the market's best estimate. Options market makers' whole job (and the purpose of the open market) is price discovery, so it's easier to let them fight it out over what price options should really be trading at. The result of that fight is valuable information -- use it. Sell a 1-month ATM put option every month until you get exercised, after which time you'll own 100 shares of stock, purchased at: This will typically give you a much better cost basis (several dollars better) versus buying the stock at spot, and it offloads the valuation math onto the options market.  Meanwhile you get to keep the cash from the options premiums as well. Disclaimer: Markets do make mistakes.  You will lose money when the stock drops more than the option market's own estimate. If you can't afford 100 shares, or for some reason still want to be in the business of creating synthetic options from pure stock limit orders, then you could maybe play around with setting your stock purchase bid price to (approximately): See your statistics book for how to set ndev -- 1 standard deviation gives you a 30% chance of a fill, 2 gives you a 5% chance, etc. Disclaimer: The above math probably has mistakes; do your own work.  It's somewhat invalid anyway, because stock prices don't follow a normal curve, so standard deviations don't really mean a whole lot.  This is where market makers earn their keep (or not). If you still want to create synthetic options using stock limit orders, you might be able to get the options market to do more of the math for you. Try setting your stock limit order bid equal to something like this: Where put_strike is the strike price of a put option for the equity you're trading.  Which option expiration and strike you use for put_strike depends on your desired time horizon and desired fill probability.  To get probability, you can look at the delta for a given option.  The relationship between option delta and equity limit order probability of fill is approximately: Disclaimer: There may be math errors here.  Again, do your own work. Also, while this method assumes option markets provide good estimates, see above disclaimer about the markets making mistakes. "Stock price is determined by the buyers and sellers, correct? Correct! ""Everything is worth what its purchaser will pay for it""-Publius Syrus What causes people to buy or sell? Is it news? earnings? stock analysis and techniques? All of these things influence investors' perception of how much a stock is worth. If AMZN makes a lot of money one quarter, then the price might go up. But maybe public perception of AMZN changes because of a large scandal. This could cause the share price to decline even with the favorable earnings report. Why do these 'good' or 'bad' news make people want to buy/sell a stock? People invest to make money. If it looks like a company is going to take a turn for the worst, people will sell. If it looks like the company has a bright, cash-laden future in front of them, people will buy. News is one of the many factors people use to determine how well a company will do. Theoretically could a bunch of people short AMZN and drive down the price regardless of how well it is doing? Say investors wanted to boycott AMZN in order to drive down the cost and get some cheap shares. This is pretty silly, but say for the sake of the argument that everyone who owned AMZN decided to sell their shares and no other investor was willing to buy the shares for less than $0.01, then AMZN shares would be ""worth"" $0.01 in that aspect. That is extremely unlikely to happen, though, for two reasons:" "During market hours, there are a lot of dealers offering to buy and sell all exchange traded stocks. Dealers don't actually care about the company's fundamentals and they set their prices purely based on order flow. If more people start to buy than sell, the dealer notices his inventory going down and starts upping the price (both his bid and ask). There are also traders who may not be ""dealers"", but are willing to sell if the price goes high enough or buy if the price goes low enough. This keeps the prices humming along smoothly. During normal trading hours, if you buy something and turn around and sell it two minutes later, you'll probably be losing a couple cents per share. Outside normal market hours, the dealers who continue to have a bid and ask listed know that they don't have access to good price information --  there isn't a liquid market of continuous buying and selling for the dealer to set prices he considers safe. So what does he do? He widens the spread. He doesn't know what the market will open tomorrow at and doesn't know if he'll be able to react quickly to news. So instead of bidding $34.48 and offering at $34.52, he'll move that out to $33 and $36. The dealer still makes money sometimes off this because maybe some trader realized that he has options expiring tomorrow, or a short position that he's going to get a margin call on, or some kind of event that pretty much forces him to trade. Or maybe he's just panicking and overreacting to some news. So why not trade after hours? Because there's no liquidity, and trading when there's no liquidity costs you a lot." "If you can't find anyone to lend you the shares, then you can't short. You can attempt to raise the interest rate at which you will borrow at, in order to entice others to lend you their shares. In practice, broadcasting this information is pretty convoluted. If there aren't any stocks for you to buy back, then you have to buy back at a higher price. As in, place a limit buy order higher and higher until someone decides to sell to you. This affects your profit. Regarding the public ledger: This functions different in different markets. United States stock markets have an evolving body of regulations to alleviate the exact concerns you detailed, but Canada's or Dubai's stock markets would have different provisions. You make the assumption that it is an efficient process, but it is not and it is indeed ripe for abuse. In US stocks, the public ledger has a 3 business day delay between showing change of ownership. Many times brokers and clearing firms and other market participants allow a customer to go short with fake shares, with the idea that they will find real shares within the 3 business day time period to cover the position. During the time period that there is no real shares hitting the market, this is called a ""naked short"". The only legal system that attempts to deter this practice is the ""fail to deliver"" (FTD) list. If someone fails to deliver, that means there is a short position active with fake shares for which no real shares have been borrowed against. Too many FTD's allow for a short selling restriction to be placed, meaning nobody else can be short, and existing short sellers may be forced to cover." In order to see whether you can buy or sell some given quantity of a stock at the current bid price, you need a counterparty (a buyer) who is willing to buy the number of stocks you are wishing to offload. To see whether such a counterparty exists, you can look at the stock's order book, or level two feed. The order book shows all the people who have placed buy or sell orders, the price they are willing to pay, and the quantity they demand at that price. Here is the order book from earlier this morning for the British pharmaceutical company, GlaxoSmithKline PLC.  Let's start by looking at the left-hand blue part of the book, beneath the yellow strip. This is called the Buy side. The book is sorted with the highest price at the top, because this is the best price that a seller can presently obtain. If several buyers bid at the same price, then the oldest entry on the book takes precedence. You can see we have five buyers each willing to pay 1543.0 p (that's 1543 British pence, or £15.43) per share. Therefore the current bid price for this instrument is 1543.0. The first buyer wants 175 shares, the next, 300, and so on. The total volume that is demanded at 1543.0p is 2435 shares. This information is summarized on the yellow strip: 5 buyers, total volume of 2435, at 1543.0. These are all buyers who want to buy right now and the exchange will make the trade happen immediately if you put in a sell order for 1543.0 p or less. If you want to sell 2435 shares or fewer, you are good to go. The important thing to note is that once you sell these bidders a total of 2435 shares, then their orders are fulfilled and they will be removed from the order book. At this point, the next bidder is promoted up the book; but his price is 1542.5, 0.5 p lower than before. Absent any further changes to the order book, the bid price will decrease to 1542.5 p. This makes sense because you are selling a lot of shares so you'd expect the market price to be depressed. This information will be disseminated to the level one feed and the level one graph of the stock price will be updated. Thus if you have more than 2435 shares to sell, you cannot expect to execute your order at the bid price in one go. Of course, the more shares you are trying to get rid of, the further down the buy side you will have to go. In reality for a highly liquid stock as this, the order book receives many amendments per second and it is unlikely that your trade would make much difference. On the right hand side of the display you can see the recent trades: these are the times the trades were done (or notified to the exchange), the price of the trade, the volume and the trade type (AT means automatic trade).  GlaxoSmithKline is a highly liquid stock with many willing buyers and sellers. But some stocks are less liquid. In order to enable traders to find a counterparty at short notice, exchanges often require less liquid stocks to have market makers. A market maker places buy and sell orders simultaneously, with a spread between the two prices so that they can profit from each transaction. For instance Diurnal Group PLC has had no trades today and no quotes. It has a more complicated order book, enabling both ordinary buyers and sellers to list if they wish, but market makers are separated out at the top. Here you can see that three market makers are providing liquidity on this stock, Peel Hunt (PEEL), Numis (NUMS) and Winterflood (WINS). They have a very unpalatable spread of over 5% between their bid and offer prices. Further in each case the sum total that they are willing to trade is 3000 shares. If you have more than three thousand Dirunal Group shares to sell, you would have to wait for the market makers to come back with a new quote after you'd sold the first 3000. Many (if not all) of these companies have former I-bankers in their corp dev groups.  The author's platform is one of many that can connect buyers and sellers directly. At the end of the day, if you are a buyer, do you have the resources and competence to conduct proper due diligence? Quite possibly.  As a seller, do you have the ability to understand industry dynamics and the ability to maximize your valuation? Doubtful.  Buy side M&amp;A has merit, but sell side M&amp;A has proven to deliver value to the majority of clients. You can't know. It's not like every stock has options traded on it, so until you either see the options listed or a company announcement that option will trade on a certain date, there's no way to be sure. I used to work at a record keeping company, and while we worked with plan administrators through transitions in investment offerings, we never actually worked through a forced sale.  From what I recall I thought that was illegal, and that all the administrator can do is stop offering the investment (i.e. no new buy ins), but people who still have their money in it can either continue to hold or sell.