HN Explorer

Ask HN: What is the actual formula for calcuating the current price of a stock?

1 points by VT_Drew ↗ HN
I have searched high and low on Google and can't find anything other than a vague explanation of how stock prices are an equilibrium where the price of stock attempts to adjust so that the number of sellers matches the number of buyers.

But what is the exact formula? If the total amount of common stock for company ABC is X and I sell 100 shares of the stock or buy a put option, what is the exact effect on the stock price (Stock goes down by $0.0000000000000000153 for example)?

Surely someone had to program this.

3 comments

[ 0.24 ms ] story [ 23.7 ms ] thread
rman666
It's market driven. There is no formula.
VT_Drew
Is it driven by limit orders then? I mean if people are buying and selling at the "market" price then it should stay sideways. If someone wants to sell to get cash and there are no market buys then the price just automatically drops to the closest limit buy order?
cauterized
AFAIK the price shown in charts and as the current price is basically the price of the last completed trade. And that, yes, is based on how much people trying to sell can get for it, aka how much people trying to buy are willing to pay for it.