Roy Tang

All good answers in other comments, but this is the best so far. Do you have any complicated knowledge regarding: “For any stock, there is a current market value, which is (simplified) the price of the stock for the last transaction it was sold.”

Well TBH, that’s pretty much it. The difference is just in semantics. The last price of the stock for any transaction isn’t the market value per se. The market value is “what people are willing to pay for the stock”. Usually financial analysts will have some general idea of the “expected value” of the stock, based on things like the company’s profits, historical performance, how quickly it’s growing, market sentiment, recent events, etc. Different analysts will use different formulas so there is no one true expected value, but typically they will fall in a small range. It’s part math/economics and part crowd psychology.

If I were to sell 1 of my stocks (worth $100) for $1 then clearly the market price would not go from 100 to 1. Is there an actual equation? Is the price changed by a certain X factor or weight applied to the number of stocks sold at that price?

For this example, if other people valued the stock at $100 but you sold at $1, some very lucky person would likely buy your shares at $1 each, then immediately turn around and sell them at a bit less than $100 for a pretty good profit. Stock trades happen quickly, so most people wouldn’t even notice (although it would register as the “low” for that stock on that day)

To give you a better idea, here’s a screenshot of the details for a stock from an online broker I use for trading. (I only trade as a side hobby, in small amounts). This is on our local stock exchange (I’m not an American), but most stock exchanges should behave around the same way.

http://imgur.com/a/oByct

On the upper right on the screenshot, you can see the value for “Previous”, this is how much the stock sold during the most recent transaction. “Last” is how much the stock sold for the tran