Shares in issue relationship with price
I must profess, I am not an economics expert, but the Index is truly inspiring an interest in this area!
I see Adam Cole stated that new shares are only ever issued when none are available in the market, I presume this means when no one has the future in their sell queue? Or that there are no instant sell futures that have been unsold?
I'm trying to tie this up with how the Index prices each player? Would this new player be issued at an increased price? How would this price be determined? Does the addition of the new futures in the market not drive down the value of those already in the market?
Shares go up and down in price based on volume bought/sold by traders
If a player is bought whilst he has no shares in the market sell queue... The player is bought at current price from FI
Yes, I appreciate that the price is driven by demand. But ultimately, who decides it? I saw FI have subcontracted their own market makers, is it they who dictate the prices?
MickTurbo last edited by
@bigmanbets the market and its users dictate the price. As a player is bought his price rises. As he is sold/listed, it falls. Every player price is dictated by traders. For a player to reach £1, somebody has to have been willing to pay 99p for that player.
@bigmanbets you mean the ipo price? Or the changes in price? Changes are set on number of shares... So if net movement on a sub£1 player is +900 shares... They go up a penny.... On over £1 players it's 600 shares +/- to move a penny up/down
IPO is set by FI and will be determined on risk factors...tends to be 80p to £1.20 but for really hyped kids we've seen much higher.
@Vespasian32 wow, okay.
Is that the right way round? Would it not make sense for players > £1, 900 share increase results in a penny increase, with players < £1, 600 share increases them by a penny?
Where did you get this information from?
@bigmanbets weight of money needed gets harder higher up so it makes sense.
Testing first hand and FI have always been open on the mechanism... That it's shares bought and sold to move 1p....just they've never confirmed what the numbers are and that they are flexible... Which is true... But easiest to take it as 900/600.
Will this pricing mechanism change when the Order Book arrives? I'm pretty sure that's what drives prices on the stock market?
Cheers for your answers so far!
@bigmanbets order books above my pay grade!