Investments - Huge drop in bid price versus last close
Depends on when you are seeing these bids & asks-- off hours, many market makers pull their bid & ask prices entirely.  In a lightly traded stock there may just be no market except during the regular trading day.
"I'm not sure the term actually has a clear meaning. We can think of ""what does this mean"" in two ways: its broad semantic/metaphorical meaning, and its mechanical ""what actual variables in the market represent this quantity"". Net buying/selling have a clear meaning in the former sense by analogy to the basic concept of supply and demand in equilibrium markets. It's not as clear what their meaning should be in the latter sense. Roughly, as the top comment notes, you could say that a price decrease is because of net selling at the previous price level, while a price rise is driven by net buying at the previous price level. But in terms of actual market mechanics, the only way prices move is by matching of a buyer and a seller, so every market transaction inherently represents an instantaneous balance across the bid/ask spread. So then we could think about the notion of orders. Actual transactions only occur in balance, but there is a whole book of standing orders at various prices. So maybe we could use some measure of the volume at various price levels in each of the bid/ask books to decide some notion of net buying/selling. But again, actual transactions occur only when matched across the spread. If a significant order volume is added on one side or the other, but at a price far away from the bid/offer - far enough that an actual trade at that price is unlikely to occur - should that be included in the notion of net buying/selling? Presumably there is some price distance from the bid/offer where the orders don't matter for net buying/selling. I'm sure you'd find a lot of buyers for BRK.A at $1, but that's completely irrelevant to the notion of net buying/selling in BRK.A. Maybe the closest thing I can think of in terms of actual market mechanics is the comparative total volumes during the period that would still have been executed if forced to execute at the end of period price. Assuming that traders' valuations are fixed through the period in question, and trading occurs on the basis of fundamentals (which I know isn't a good assumption in practice, but the impact of price history upon future price is too complex for this analysis), we have two cases. If price falls, we can assume all buyers who executed above the last price in the period would have happily bought at the last price (saving money), while all sellers who executed below the last price in the period would also be happy to sell for more. The former will be larger than the latter. If the price rises, the reverse is true." Many of the above comments are correct about illiquidity.  If someone needs to trade at a time of low liquidity, for instance when the markets are closed, the bid/ask spread can often be large to induce someone to trade at odd times.  Especially as the broker/bank on the other side of the trade can't immediately go to the market to close out the risk as they often prefer to do. In this case the jump is actually is large but not that large (~4%).  Note this trade price is near the close price on the day before. The system I use shows a trade that evening for 5 shares near the price on the graph.  If you called me after I was done with work and tried to buy 5 shares I'd quote you a bad price too. Consider the mechanic which actually drives the 'price' of a stock. In simplest terms, the 'price' of a stock is the price at which the most recent trade occurred. ie: if the price of IBM is $100/share, that means the last time someone bought IBM stock, they paid $100. Above and below the 'spot price', are dozens/hundreds/thousands of buyers and sellers who have placed orders that no one is yet willing to match. ie: if IBM's spot price is at $100, there could still be 10,000 people willing to sell for $101 (called the 'ask' price, for the lowest price someone is currently willing to sell at), and 15,000 willing to buy for $99 (called the 'bid' price, for the highest price someone is currently willing to buy for).  Until someone is willing to buy for $101, then no one will be able to sell at $101. Until someone is willing to sell for $99, no one will be able to buy for $99. Typically orders are placed in the market at a particular limit. Meaning that those orders to buy at $99/sell at $101 are already in the 'system', and will be matched immediately as soon as someone is willing to meet the price on the other side. Now consider general market economics: high demand drives up price, and high supply drives down price. If the details above for IBM were yesterday, and today some news came out that IBM was laying off employees, imagine that another 10,000 people who held shares wanted to sell. Now there would be 20,000 sellers and only 15,000 buyers. If those new sellers were aggressive about wanting to sell, they would have to drop their price to $99, to match the highest buyers in the market. Put together, this means that as more sellers enter the market, supply of shares increases, driving down price. Conversely, as more buyers enter the market, demand for shares increases, driving up share price. As a result of the above, you can say that (all else being equal) if price for a stock goes up, there were more buyers that day, and if price goes down, there were more sellers that day. On the face of it, that is not necessarily true, because you could have the same number of buyers and sellers, one side could have simply decreased/increased their acceptable price to match the other side. Residential Construction at 362x, by the way. I'm going to hazard a guess here - Say XYZ corp trades at $100, and it's showing a normal earnings of $10 the last few years. Its industry falls on hard times, and while it makes enough to keep its doors open, profits fall to $1. The company itself is still sound, but the small earnings result in a high P/E. By the way, its book value is $110, and they have huge cash on the books along with real estate.  I offer these details to show why the price doesn't drop like a rock.  Now, biotech may be in a period of low reported earnings but with future results expected to justify the price. On one hand it may be an anomaly, with earnings due to rise, or it may be a bit of a bubble. An analyst for this sector should be able to comment if I'm on the right track. "Often these types of trades fall into two different categories.   An error by broker or exchange.  Exchange clearing out part of their books incorrectly is an example.  Most exchanges make firms reopen their positions for after market hours.  There may have been an issue doing so or exchange could incorrectly cancel positions.  I was in the direct feed industry for years and this was a big issue.  At the same time the broker can issue a no limit buy on accident (or has software that is prospecting and said software has a bug or written poorly).   unscrupulous parties looking to feign an upswing or downswing in market.  Let's say you hold 500k shares in a stock that sells for $11.  You could possibly buy 100 shares for $13.  Trust me you will find a seller.  Then you are hoping that people see that trade as a ""norm"" and trade from there, allowing you to rake in $1M for spending an extra $200 - NOTE this is not normal and an extreme example.  This was so common in the early days of NASDAQ after hours that they discontinued using the after hours trades as part of historical information that they keep like daily/yearly high or closing price.  The liquidity allows for manipulation.  It isn't seen as much now since this has been done a million times but it does still happen." "Firstly, if a stock costs $50 this second, the bid/ask would have to be 49/50.  If the bid/ask were 49/51, the stock would cost $51 this second.  What you're likely referring to is the last trade, not the cost.  The last trading price is history and doesn't apply to future transactions. To make it simple, let's define a simple order book.  Say there is a bid to buy 100 at $49, 200 at $48, 500 at $47.  If you place a market order to sell 100 shares, it should all get filled at $49.  If you had placed a market order to sell 200 shares instead, half should get filled at $49 and half at $48.  This is, of course, assuming no one else places an order before you get yours submitted.  If someone beats you to the 100 share lot, then your order could get filled at lower than what you thought you'd get.  If your internet connection is slow or there is a lot of latency in the data from the exchange, then things like this could happen.  Also, there are many ECNs in addition to the exchanges which may have different order books.  There are also trades which, for some reason, get delayed and show up later in the ""time and sales"" window. But to answer the question of why someone would want to sell low... the only reason I could think is they desire to drive the price down." This would otherwise be a comment, but I wish to share an image. A stock I happened to own, gapped up on the open to $9.20 and slowly worked its way down to $8.19 where it closed up 6% but near its low for the day.  This is an addendum to my comment above, warning about buying a stock on the open when news is coming out. Or more important, to be mindful of that news and the impact it might have on the stock. In this case, when the news came out and the stock had closed at $7.73, one would need to decide if he wished to buy it at any cost, or place a limit order.  I've redacted the name of the company, as this discussion has nothing to do with any particular stock, I'm just offering an example of the effect I warned about, three weeks ago. (Full disclosure, I got out at $8.70 in the first minutes of trading.) "Your chance of even correctly recognizing the actual lowest point of a dip are essentially zero, so if you try to time the market, you'll most likely not get the ""buy cheap"" part perfectly right. And as you write yourself, while you wait for the dip, you have an ongoing opportunity cost. Cost averaging is by far the best strategy for non-professional and risk averse investors to deal with this. And yes, over the long run, it's far more important to invest at all than when you do it."