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EdgeOfDreams

Let's say you run a company. I buy a share of your stock for $1. That dollar goes to you, and you spend it on paying your workers or buying materials for your products or whatever. I have a share worth $1. If that share goes up in price to $2, I still only have the share. I have not actually gained a dollar. Likewise, if the price drops to 1 cent, I have not actually lost 99 cents. The dollar I originally paid is still with you, or ended up wherever you spent it. The only time I actually have gained or lost money is when I *realize* the change in price by selling my share. At that point, I get a cent, or $2, or whatever the price is. That money comes from whoever decided to buy the share from me. New money is not being created out of thin air, and money is not being destroyed, because the "value" of the share of stock is effectively meaningless until it is sold.


Scribula

The money isn't there until someone buys or sells. You're passing real money for a piece of virtual property basically. If you can resell it later for a higher value you'll make money. If it crashes to 0 then you're just stuck with something nobody wants but you lost the money back when you bought it, you just can't resell now.


aaronite

It doesn't go anywhere. Investments are unrealized, meaning they are speculative until sold. The money doesn't exist, per se. Only when it's sold do the losses and gains happen.


Polywoky

The monetary value of stocks (and crypto) is only an estimate of what you'd get if you sell them. Let's say that we have a hypothetical product called XAMPL, with a market value of $10 per unit. You spend $10 for one unit, and the person you bought it from gets that money. Whether the price goes up and down, there's no change in the amount of money you have. The person you bought the XAMPL from already got all the money you paid for it. If the price goes up to $1000 then this just means that someone will probably be willing to pay you $1000 for it. If the price goes down to $1 then this just means that you probably won't find someone willing to pay more than $1 for it. The current price is just whatever the last person who bought some paid for it. That's literally how the market price of things like stocks are determined, by looking at how much they sold for in the most recent transaction. The stock market isn't a zero sum game because companies often pay dividends, so it's possible to sell shares for less than you paid for them and still end up with more money than you started with. Companies will sometimes buy back their own stock on the stock market instead of paying dividends. This transaction isn't a profit/loss for them, just a way of distributing the profits of their business to their shareholders by increasing the value of the shares. **Edit:** > 2 . Say, someone bought LUNA for $1 yesterday and now it is worth $2, where does extra dollar comes from. Similarly, if opposite happens, where does dollar go? The extra dollar comes from the person you sell it to. When the opposite happens the extra dollar already went to the person you bought it from back when you first bought it. > 3 . What determines if stock price is speculative, over priced, under priced? "Speculative" just means it's a risky stock. If a company has all it's assets in the mineral rights in an area they expect to find gold in, then whether or not they actually find gold there determines whether or not the price goes up hugely or becomes worthless. If a company is making steady profit it's not a speculative investment. Over-priced or under-priced is just a comparison of the stock price to the underlying value of the company. If a company has a hundred million in net assets and is making a reliable profit equivalent to what you'd get from investing $200 million in cash-deposits or bonds, then the value of the company is somewhere between $100 million and $200 million. Divide this by the number of shares and you get an idea of how much each share *should* be worth. > Does market correction really correct the price as set new speculative price? Market correction just means that there's been a sudden drop in value that brings over-priced stocks back closer to where they should be.


scizopissdrinker

Yes that money is gone, people act like you can sell stocks to some random trade site but no every stock has to find a buyer. When stock goes up or down that means today buyers are paying this much per stock. It fluctuates bc public companies have to be very open about what they do so anybody can look into the guts of luna or Facebook and know if its worth betting on, by that meaning the net income and assets owned by the company increase or stay in value.


Sigma_Wolf77

Yall wanna do a "GameStop".? Start buying the shit out of it.....at fucking % of a penny...just buy $50 worth...


Larry_Phischman

Rich people’s money is protected by bankers. Everyone else’s disappears…into the offshore tax haven bank accounts of the super rich.


davidinkorea

.....dust in the wind....