Price Traders
AAA
  1. Stock Traders’ vs. Stock Investors' Roles in the Marketplace
  2. Decision-Making Methods: Informed, Uninformed, Intuitive
  3. Informed Traders: Fundamental Traders, Technical Traders
  4. Swing Traders
  5. Buy and Hold Traders
  6. Value Traders
  7. Trend Traders
  8. KISS Traders
  9. Momentum Traders
  10. Range-bound Traders - Break-out Traders - Channel Traders
  11. Options Traders
  12. Options Seller Traders
  13. Day Traders
  14. Pattern Day Traders
  15. Intra-Day Traders
  16. Intra-Day Scalp Traders
  17. Introduction to Stock Trader Types
  18. Contrarian Traders
  19. Active and Passive Traders
  20. Futures Traders
  21. Forex Traders
  22. Online Stock Traders
  23. Pivot Traders
  24. News Traders
  25. Noise Traders
  26. Sentiment-Oriented Technical Traders
  27. Intuitive Traders
  28. Price Action Traders
  29. Price Traders
  30. Detrimental Traders
  31. Unsuccessful Types of Stock Traders
  32. Conclusion

Price Traders

The price trader is the analyst who tries to figure out exactly what a stock is worth.

Price traders are the most common type of trader in the stock market. Price traders buy a stock based on a fixed price. For example, they study Apple Computer (Nasdaq: AAPL) and determine that based on the company's public information as of August 2013, the stock is worth $400 or $425 or $387.25 a share. Price Traders buy the stock if it is below that value and sell the stock if it is above that value.

Because of price traders, stocks often trade up to a certain value and stop. Stocks also tend to trade between values quickly. For example, stocks - any stocks - tend to be more volatile when their stock price is between $45 and $50 as well as $90 and $100.

Some stocks also tend to "trade on the fives and tens" - meaning that the stock will trade at $5, move very quickly to $10, and then move very quickly to $15. This is due in part to option strike prices, which have either $5 or $10 separation in strike prices. Stocks with $5 option strike prices will often trade at the $2.50 level as well. This phenomenon is often seen most clearly at the end of a month when option expiration occurs.

Price traders never arrive at the same value for a stock. Given the hundreds, perhaps thousands, of individual criteria that can affect stock value, the only way two price targets end up being the same is by agreement or cohesion among analysts. As such, stocks tend to move quickly between common price targets.

In the end, the systems used by traders to buy and sell stocks force them to be price traders and traders tend to enter round numbers into these systems. This creates a situation where stocks tend to trade to round numbers: $1.00, $0.50, $0.25 and $0.75.

Detrimental Traders

  1. Stock Traders’ vs. Stock Investors' Roles in the Marketplace
  2. Decision-Making Methods: Informed, Uninformed, Intuitive
  3. Informed Traders: Fundamental Traders, Technical Traders
  4. Swing Traders
  5. Buy and Hold Traders
  6. Value Traders
  7. Trend Traders
  8. KISS Traders
  9. Momentum Traders
  10. Range-bound Traders - Break-out Traders - Channel Traders
  11. Options Traders
  12. Options Seller Traders
  13. Day Traders
  14. Pattern Day Traders
  15. Intra-Day Traders
  16. Intra-Day Scalp Traders
  17. Introduction to Stock Trader Types
  18. Contrarian Traders
  19. Active and Passive Traders
  20. Futures Traders
  21. Forex Traders
  22. Online Stock Traders
  23. Pivot Traders
  24. News Traders
  25. Noise Traders
  26. Sentiment-Oriented Technical Traders
  27. Intuitive Traders
  28. Price Action Traders
  29. Price Traders
  30. Detrimental Traders
  31. Unsuccessful Types of Stock Traders
  32. Conclusion
RELATED TERMS
  1. Institutional Ownership

    The amount of a company’s available stock owned by mutual or ...
  2. Indicator

    Indicators are statistics used to measure current conditions ...
  3. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  5. Acquisition

    A corporate action in which a company buys most, if not all, ...
  6. David Einhorn

    Known for his short selling strategy, activist investor David ...
  1. When and why are technical indicators useful?

    Discover what technical indicators are, when they are useful and how their specific design limits their meaningfulness to ...
  2. Who exactly needs to be paying attention to the time interest earned ratio of a company?

    See why creditors pay special attention to a firm's times interest earned ratio and how their interpretation impacts management ...
  3. What does a high times interest earned ratio signify with regard to a company's future?

    Learn how the times interest earned ratio affects the perception of solvency of a company, and what a high ratio can mean ...
  4. How do I implement a forex strategy when spotting a Stick Sandwich Pattern?

    Learn about the stick sandwich and how to use this reversal pattern in conjunction with other technical indicators to create ...

You May Also Like

Related Tutorials
  1. Investing Basics

    Industry Handbook

  2. Fundamental Analysis

    Discounted Cash Flow Analysis

  3. Fundamental Analysis

    Ratio Analysis Tutorial

  4. Options & Futures

    Binary Options Tutorial

  5. Mutual Funds & ETFs

    Top ETFs And What They Track: A Tutorial

Trading Center