How is stock price determined?
Yes, stock price is determined by the last trade price. There are always going to be people who have put in a price to buy a stock (called a bid price) and people who have put in a price to sell a stock (called an ask price). Based on your example, if the last trade price for the stock was $1.23, then you might have the following bid prices and ask prices: So if you put in a limit order to buy 100 shares at $100, you would buy the 40 shares at $1.23, the 15 shares at $1.24, and the 45 shares $1.25.  The price of the stock would go up to $1.25. Conversely, if you put in a limit order to sell 100 shares at $0.01 (I don't think any broker would allow a sell price of $0.00), you would sell 30 shares at $1.22, 20 shares at $1.21, and 50 shares at $1.20.  The price of the stock would go down to $1.20. Stock price is determined by what's being asked for it, and what's being paid for it. The reported price is either a recent average, or is the last price at which a sale actually took place, depending on which you've asked for. Limit orders are an agreement between you and your brokerage, and have no direct effect on price. When and if their condition is triggered and the transaction takes place, the transaction is what's significant. "You can interpret prices in any way you wish, but the commonly quoted ""price"" is the last price traded. If your broker routes those orders, unlikely because they will be considered ""unfair"" and will probably be busted by the exchange, the only way to drive the price to the heights & lows in your example is to have an overwhelming amount of quantity relative to the order book. Your orders will hit the opposing limit orders until your quantity is exhausted, starting from the best price to the worst price. This is the functional equivalent to a market order." "The answer to each of your questions is no. It is important to appreciate that the ""quoted"" ticker price may be delayed by say 15 minutes, and thus is not ""real-time."""
"The ""price"" is the price of the last transaction that actually took place. According to Motley Fool wiki: A stock price is determined by what was last paid for it. During market hours (usually weekdays from 9:30AM-4:00PM eastern), a heavily traded issue will see its price change several times per second. A stock's price is, for many purposes, considered unchanged outside of market hours. Roughly speaking, a transaction is executed when an offer to buy matches an offer to sell. These offers are listed in the Order Book for a stock (Example: GOOG at Yahoo Finance).  This is actively updated during trading hours. This lists all the currently active buy (""bid"") and sell (""ask"") orders for a stock, and looks like this:  You'll notice that the stock price (again, the last sale price) will (usually*) be between the highest bid and the lowest ask price. * Exception: When all the buy or sell prices have moved down or up, but no trades have executed yet." Besides overnight news events and auction mechanisms there is a more fundamental reason the price of a stock is always moving.  Theoretically the stock price will move slightly even in the unlikely scenario that absolutely nothing of interest happens during the entire night.  Let me go into that in some more detail: Stock valuation using Discounted Cash FLow One of the fundamental reasons that stock value is constantly changing is because underneath every stock there is a company that expects to make some kind of profit or loss in the future. We have to go into the fundamentals of stock value to understand why this is important: One popular way to determine the value of a stock is by looking into the future and summing up all the earnings (or cashflows) it has yet to produce. You have to reduce each amount by a certain factor that gets larger for payments that are farther into the future. Think of it this way: a dollar in hand now is better than a dollar that you get tomorrow. This method of valuation is called Discounted Cash Flow (abbr. DCF; see the wikipedia article on DCF) Time's effect on stock value Now take the Close price C, and the open price O. Let's assume that since there has been no news, the expectations for future earnings are the same for C and O. Remember that the discounting factor for these earnings is dependent on the time until the cashflow occurs? For O, this time is slightly shorter than for C, and therefore the value will be slightly higher (or lower, when the company is expected to incur losses). So now you can see that even without all the external forces that continuously push and pull on the stock price, a stock still changes in value over time. Hope this helps. Which is why outside of Germany, you have abysmal unemployment rates. 23.6% in Greece. 19.6% in Spain. 11.7% in Italy. 10% in France. 11.2% in Portugal. The US unemployment rate during the Great Recession peaked at 10%.   You can have labor that is controlled like you mention and high unemployment or lower controls and less unemployment. Is it better to have high unemployment but workers that are better off or lower unemployment and workers that aren't as well off?   The Euro zone is forgetting how to be competitive. We live in an economy where price matters. The price of labor determines the prices of goods and services. And supply and demand of products and services are determined by prices. Its a cold hard truth. There's a lot of hype about HFT. It involves computers doing things that people don't really understand and making a bunch of rich guys a bunch of money, and there was a crisis and so we hate rich wall street guys this year, and so it's a hot-button issue. Meh. There's some reason for concern about the safety of the markets, but I think there's also a lot more of people trying to sell you a newspaper. Remember that while HFT may mean there are a lot of trades, the buying and the selling add up to the same thing. Meanwhile, people who buy stock to hold on to it for significant periods of time will still affect the quantity of stock out there on the market, applying pressure to the price, buying and selling at the prices that they think the security is worth.  As a result, it's unlikely that high-frequency trading moves the stock price very far from the price that the rest of the market would determine for very long; if it did, the lower-frequency traders could take advantage of it, buying if it's too low and selling if it's too high. How long do you plan to hold a stock? If you're trying to do day-trading, you might have some trouble; these people are competing with you to do the same thing, and have significant resources at their disposal. If you're holding onto your stock for years on end (like you probably should be doing with most stock) then a trivial premium or discount on the price probably isn't going to be a big deal for you. Companies pay their employees in stocks and stock options, so they have an incentive towards increasing a company's share price. There are many elements that go into a stock's price. For example, if you hold a stock for eternity you should be indifferent if the expected present value of all its future dividends (i.e. earnings) equals the price you paid for it. Also, buy-back policies and voting rights determine stock price as well. The theory is that since shareholders want return on their investments they would promote company executives in such a way that their incentives are aligned to increase the share price. As others have pointed out, the value of Apple's stock and the NASDAQ are most likely highly correlated for a number of reasons, not least among them the fact that Apple is part of the NASDAQ. However, because numerous factors affect the entire market, or at least a significant subset of it, it makes sense to develop a strategy to remove all of these factors without resorting to use of an index. Using an index to remove the effect of these factors might be a good idea, but you run the risk of potentially introducing other factors that affect the index, but not Apple. I don't know what those would be, but it's a valid theoretical concern.  In your question, you said you wanted to subtract them from each other, and only see an Apple curve moving around a horizontal line. The basic strategy I plan to use is similar but even simpler. Instead of graphing Apple's stock price, we can plot the difference between its stock price on business day t and business day t-1, which gives us this graph, which is essentially what you're looking for:  While this is only the preliminaries, it should give you a basic idea of one procedure that's used extensively to do just what you're asking. I don't know of a website that will automatically give you such a metric, but you could download the price data and use Excel, Stata, etc. to analyze this.  The reasoning behind this methodology builds heavily on time series econometrics, which for the sake of simplicity I won't go into in great detail, but I'll provide a brief explanation to satisfy the curious. In simple econometrics, most time series are approximated by a mathematical process comprised of several components: In the simplest case, the equations for a time series containing one or more of the above components are of the form that taking the first difference (the procedure I used above) will leave only the random component. However, if you want to pursue this rigorously, you would first perform a set of tests to determine if these components exist and if differencing is the best procedure to remove those that are present. Once you've reduced the series to its random component, you can use that component to examine how the process underlying the stock price has changed over the years. In my example, I highlighted Steve Jobs' death on the chart because it's one factor that may have led to the increased standard deviation/volatility of Apple's stock price. Although charts are somewhat subjective, it appears that the volatility was already increasing before his death, which could reflect other factors or the increasing expectation that he wouldn't be running the company in the near future, for whatever reason. My discussion of time series decomposition and the definitions of various components relies heavily on Walter Ender's text Applied Econometric Time Series. If you're interested, simple mathematical representations and a few relevant graphs are found on pages 1-3. Another related procedure would be to take the logarithm of the quotient of the current day's price and the previous day's price. In Apple's case, doing so yields this graph:  This reduces the overall magnitude of the values and allows you to see potential outliers more clearly. This produces a similar effect to the difference taken above because the log of a quotient is the same as the difference of the logs The significant drop depicted during the year 2000 occurred between September 28th and September 29th, where the stock price dropped from 26.36 to 12.69. Apart from the general environment of the dot-com bubble bursting, I'm not sure why this occurred. Another excellent resource for time series econometrics is James Hamilton's book, Time Series Analysis. It's considered a classic in the field of econometrics, although similar to Enders' book, it's fairly advanced for most investors.  I used Stata to generate the graphs above with data from Yahoo! Finance: There are a couple of nuances in this code related to how I defined the time series and the presence of weekends, but they don't affect the overall concept. For a robust analysis, I would make a few quick tweaks that would make the graphs less appealing without more work, but would allow for more accurate econometrics. The last column in the source data is volume (the number of stocks that was exchanged during the day), and it also has a value of zero for that day, meaning that nobody bought or sold the stocks on that day. And since the prices are prices of transactions (the first and the last one on a particular day, and the ones with the highest/lowest price), the prices cannot be established, and are irrelevant as there was not a single transaction on that day. Only the close price is assumed equal to its previous day counterpart because this is the most important value serving as a basis to determine the daily price change (and we assume no change in this case). Continuous-line charts also use this single value. Bar and candle charts usually display a blank space for a day where no trade occurred. That is mostly true, in most situations when there are more buy orders than sell orders (higher buy volume orders than sell volume orders), the price will generally move upwards and vice versa, when there are more sell orders than buy orders (higher sell volume orders than buy volume orders), the price will generally move downwards. Note that this does not always happen, but usually it does. You are also correct that for a trade to take place a buyer has to be matched with a seller (or the buy volume matched with the sell volume). But not all orders get executed as trades. Say there are 50 buy orders in the order book with a total volume of 100,000 shares and the highest buy order is currently at $10.00. On the other side there are only 10 sell orders in the order book with total volume of 10,000 shares and the lowest sell order is currently $10.05. At the moment there won't be a trade unless a new buyer or seller enters the market to match the opposing side, or an existing order gets amended upper or lower to match the opposing side. With more demand than supply in the order books what will be the most likely direction that this stock moves in? Most likely the price will move upwards. If a new buyer sees the price moving higher and then looks at the market depth, they would most likely place an order closer to the lowest sell order than the current highest buy order, say $10.01, to be first in line in case a market sell order is placed on the market. As new buy orders enter the market it drives the price higher and higher until the buy orders dry up.