[removed]

If it'sa highly traded stock, there's always someone or some fund out there that's looking to buy it.

But something like my grandparents bought stock in the local phone company a few decades ago, and you have to hunt for someone willing to buy it

It can be pretty much anyone. It could be me. It could be someone's personal financial manager. It could be a mutual fund manager or an automated program designed to trade according to specific rules. It could be your neighbor's grandmother. It could be the company buying back stock, but this doesn't happen too often - usually only when the company is in a really strong financial position or they want to prevent buyout, or in the case of something like Twitter they did get bought out and are trying to turn from a publicly traded company to a completely private one.

If you are trading at market values, which is about what people are willing to pay for the stock or sell it for, then you'll have a much easier time actually selling it. If you try to sell something that is currently trading at $10 for $100 you'll see that the order probably is not going to go through unless someone is desperately trying to buy as much of that stock as possible and put in a very high bid for a lot of them.

[deleted]

[removed]

It could be individual retail investors, institutions or the brokerage itself. The brokerage is what is known as a broker-dealer. Think of it as a drug or car dealer who has to buy inventory then to sell it again for a profit. This is why stocks have a big/ask spread. That difference, among other things, is the profit available to a buyer/seller.

No, its another person just like you (or a fund, but I digress). It is rarely the company itself buying the stock (though buybacks do happen, but I digress again).

The number of buyers is always equal to the number of sellers - that is what the stock price actually is (the price at which buyers = sellers). The price is constantly adjusting to keep that statement true.

So, for example, if you want to sell stock at $100/share, maybe no one wants to buy it for that - they only want to buy at $80/share. Someone else, who really wants to sell will offer $90/share and someone else who really wants to buy will do that. The stock price is now $90. You still have your share at $100 and the guy wanting to pay $80 still doesn't have his, but since the number of people willing to sell at $90 = the number of people willing to buy at $90, that is where the price evens out.

It isn't the case that someone is always willing to buy at the same time someone wants to sell. What happens is if you want to sell your stock you can either find someone willing to buy it or you put out a sell order that basically is a notice saying "I'm willing to sell Y stocks for X amount of dollars." In which case you sit around and wait till someone is willing to fulfill that order.

On the flip side someone wanting to buy one can either grab one for those immediately willing to be sold or put in a buy order for a certain price.

So when you sell you're either fulfilling one of those buy orders or your putting in a sell order yourself and waiting for someone to buy it.

It is another person/organization. It could be the company itself but the company is rarely a big purchaser of their own stock on a day to day basis. The entire purpose of the stock MARKET is to provide a place for buyers and sellers to meet, agree on price and transact their goods (stocks in this case). In the past this was an actual physical space (like a real market) and brokers would shout out buy and sell requests. Today it is mostly electronic trading on computers.

A modern stock market is designed to be really fast and efficient in transaction. The major stock markets has some things working in the background. For many stock markets, some "special" companies will "make the market" for some particular stock. They will be the counterparty (ie if you buy they will sell and if you sell they will buy) to transactions for the company they are the market makers for. Since buys and sells generally balance out over time, these companies just make transactions work quicker.

For small retail investors dealing with a broker and small transactions, the brokerage themselves can act as a counterparty (essentially you're selling and buying from your broker and the broker consolidates all these customer transactions and balances it out by the end of the day by going to the market and squaring it off)

Thank you all, great responses, now I kinda get it.

> they get to sell it right away

That's not true, it just seems like it's true. A stock market matches people who are offering to sell a stock with people who want to buy a stock. But it's entirely possible that you elect to sell a stock, and no one wants to buy it, so it won't sell.

The price that you see on a stock market is actually the price of the most recent transactions of that stock. When you actually go to sell a stock your software will ask you what price you want to sell the stock at. Often it will offer a pre-filled in price range that you might want to sell the stock at. Most people just click OK, but you can change these numbers if you want to. You can it to to ask for more, or ask for less.

In general when the price of a stock is falling there's a BUNCH of sell orders for the current price that are going unsold. It's the people who are willing to sell for less than the current price that are getting their trades completed and that's why the price keeps falling over time. Because there's more and more sellers under the current market price.

If you look at a website like this one https://www.cboe.com/us/equities/market_statistics/book/aapl/

You'll see a real time list of "bids" and "asks" for Apple Stock. The "bid" is the maximum price that a buyer is willing to pay for a share of stock. An "ask" is the minimum price that a seller is willing to take. When a bit and an ask meet at the same price, a transaction occurs and the stock is bought/sold.

Lots of people put in sells or buys at prices other than the current market price in hopes that someone desperate comes along and they can complete the transaction. But most of the time these orders just expire without a transaction ever occurring.

Other investors (not the company, in general) are buying the shares you are selling. If there isn't an even match of those who want to sell and those who want to buy, the price declines until the buyers and sellers are in equilibrium. If there are more wanting to buy than wanting to sell, then price increases.

Only when companies do share buybacks might your shares go to the company itself vs. another investor.

It’s probably someone very similar to you when you bought it, or whoever you bought it from.

[deleted]

The moment you buy stock on an exchange, your exchange is looking for sell orders of other entities. You're just buying from random people like on a simple market.

If there's nobody to sell on that certain price, price will move up and you'll have to buy more expensive. This will raise the price.

Please read this entire message

Your submission has been removed for the following reason(s):

Subjective or speculative replies are not allowed on ELI5. Only objective explanations are permitted here; your question is asking for speculation or subjective responses. This includes anything asking for peoples' subjective opinions, any kind of discussion, and anything where we would have to speculate on the answer. This very much includes asking about motivations of people or companies. This includes Just-so stories.

If you would like this removal reviewed, please read the detailed rules first. If you believe this submission was removed erroneously, please use this form and we will review your submission.