Let us understand first what is the price of the share?

Whenever you want to buy a stock a given price then you should have a seller who is offering share at your bid price and vice-versa. If a seller’s asking price and buyer’s bid price matches then a trade occurs between the buyer and the seller. The trade price is known as the price of the share or the last traded price.

During a day a lot of traders and investors buy and sell shares of the company. The number of shares traded is known as the volume of the stock.

The number of shares which can affect the price of the stock depends on the market capitalization of the stock and the demand-supply of that stock in the market. So if the market capitalization of a stock is low then the stock will have less floating shares in the market. Then a small amount of trade order can also affect the price of the stock. But sometimes 70% of the total retail shares, if traded, would also not bring the price up, whereas sometimes even 1 share could fluctuate the price.

Companies such as Infosys, Reliance Industries, etc have a very large market capitalization (> 1 lakh crores) so if you place an order of 100 or even 1000 shares then it will not affect the price of the stock.

Whereas smallcap companies such as Standart Capita, Indrayani Biot, etc have very less market capitalization. So even if you trade with a small order of 10 or 100, it will change the price of the stock.

Here are some screenshot, just to represent the small volume affecting the stock prices.


I hope this post has been helpful to you.

Read: Why stock prices change?


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