PianoMan, if there were 1,000,000 shares showing red, then it was net selling. Meaning there was buying and selling that went on that day, but more people wanted to sell than buy. Sometimes an investor or institution is on the other side of that trade, but don’t forget, there are market makers that takes sides of trades and positions in trades too. And they tend to go into the options market and immediately hedge their risks, since they’re mainly trying to make the spread between the bid and ask.
So, the bar is showing what happened on a net basis. If there were always an equilibrium of buyers and sellers, the price would never move. Its because of that difference that prices move up and down.
Let’s say I owned a store and I had 12 iPhones on my shelf. If 20 people came in and wanted to buy…I could raise my prices if I wanted to because there was more demand than I had supply for. However, if I had those same 12 iPhones sitting on the shelf and only 4 people came in over a period of time that wanted to buy my iPhones, then I’ll likely have to mark down the price of my iPhones because of the lack of demand for my iPhones or you could say I have more supply than meets demand.
Prices go up and down and even gap higher and gap lower based off of where buyers and sellers are willing to agree on price. I can try to sell my house for any amount I wish. However, there’s only going to be demand for my house once I get down into the ball park of where there’s buyers willing to pay for my house.
So, anyway, I hope this helps explain both volume and why prices move the way they do.
Thanks to Jerry for using the search bar so that our past conversations could be read about it too.