We know every transaction involves two participants, called a buyer and a seller. So, when you buy 100 shares of lot or stocks, it means that someone else, here the seller must have sold to you. Either the buyer or seller takes the tough part and active role in pushing or pulling the shares up and down. Here, the surprising logic is that both the buyer and seller think in contrast dimensions and so the exchange of the stock happens. And the billion-dollar question is when the seller wants to get rid of the stock and get the money back, why the buyer wishes to buy, and logically, vice-versa too.
It is very confusing and sometimes contradicting to understand why the buyer wants to buy and why the seller wants to sell the same stock. The exciting thing is to understand the interpretations and thought processes of each of them.
Why have bought Shares?
When the company initiates the IPO or Initial Public Offering, investors and traders do invest in the form of stocks of the enterprise. The interpretation and anticipation of them do change from time to time, as the market of the company does fluctuate from time to time. The investors and traders stand as the primary investors. The demand of each of the enterprise is a vast array of traders and investors, who exchange the stock by selling and buying, thereby pushing the price up to and down.
The most crucial significant point and the most challenging task are to predict the rise and fall of the stock. The buyer, who is interested in buying the shares with the ultimate goal and objective of making more money, when he or she perceives that the company started performing well and expected to rise in the future.
Why have sold Shares?
Investors invest in the stock of the companies and hold them for the longer period until they perceive the best time to sell off and get the best returns. However, the traders, who invest in stock through IPO, sell off the stock in the form of shares after their expected returns are obtained. There is also another instance when the seller wants to sell off the shares of the company, in which they have invested. Sellers become more and more aggressive to sell off the shares when the prices of the particular stocks are lowered and go down.
Apart from the buying and selling of the shares by each of the investor, there is another benefit of buying the shares in companies, like mature and established companies. These companies pay the regular monetary benefit in the form of the dividend. The dividend is the money paid to the shareholder, from the profit of the enterprise.
The shareholder possesses another benefit, which is in the form of the vote. The shareholder, after buying the shares of the specific company, can use the voting rights, multiplied the number of shares he or she has acquired. All the critical point is keeping an eye on the regular performance of the company and buy and sell at the right time.