Friday, 6 July 2012

Why is this moviestock going up in price today?

Because traders are buying and/or covering the moviestock.

If the price is going down, it's because traders are selling and/or shorting the moviestock.

But what you are really asking is why traders are trading the way they are.

The first thing you need to do is check on whether there has been any news concerning the moviestock.

You can do this by going to the moviestock page and looking at the "Related Posts" section to see if anything  about the movie has been posted on the HSX blog or on the forums.  This will give you a link to any posts in the forums that have been tagged with the moviestock.

You can also check the forums to see if there has been any other discussion about the moviestock.  Moviestocks that have been mentioned in the forums can sometimes go up (or down) in price.  This doesn't happen because of any news, but just because of discussion about the movie.  Someone might have commented that they are excited to see it, or that it sounds stupid.

If there isn't any news on the moviestock, then the reason the price is changing is because traders are following the price swings of the moviestock.  When a moviestock goes up in price, active traders will cover the moviestock to cut their losses and possibly buy it, expecting the price to go up further.  Covering and buying puts further upward pressure on the price, which causes more traders to buy and cover, and so on.  This can easily cascade into a big change in price.

The price change is not based on the fundamentals of the moviestock.  The moviestock price is changing because traders are anticipating how other traders will act.

It's because traders are buying and covering (or selling and shorting) the moviestock.

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