Remember, a company’s first set of public investors buy the shares directly from the company! Each subsequent transaction in the stock is between two existing investors and not the company. Therefore, a computerized system is used by the exchange to match a buyer with a seller in no time!
A liquid market is characterized by a high volume of buy and sell orders and a low Bid-Ask Spread. Bid-Ask Spread is the difference between the highest price quoted by a buyer and the lowest price quoted by a seller.
A trade is finally executed when two orders are matched. For this to happen, either a buyer must accept a higher price or a seller must accept the buyer’s lower price. In case of a mismatch in the demand and supply, such orders will remain unfilled until equilibrium is restored.
So, exchanges match orders! What else?
Who is the buyer and seller in the stock market?
In the stock market, a buyer is someone who wants to purchase shares because they expect the price to go up or want to own part of a company. A seller is someone who wants to sell shares to book profits, cut losses, or reallocate funds. Every trade happens only when a buyer’s bid price matches a seller’s ask price — that’s how ownership changes hands.
How to know buyer and seller in the share market?
You can’t see the actual identities of individual buyers and sellers in the market, but you can infer their behaviour by watching:
- Price movement
- Volume spikes
- Bid and ask changes
- Order flow
Higher buying pressure pushes prices up, while increased selling pressure pushes prices down — this tells you who is dominating at a given time.
How to check buyers and sellers in the stock market?
To check who’s driving the market:
- Level 2 / Market depth on your trading platform shows demand (bids) and supply (asks) at different price levels.
- Time and Sales (T&S) displays real-time trade prints — this shows execution price, volume, and whether trades hit the bid (seller-driven) or hit the ask (buyer-driven).
- Volume indicators and order book skew help identify if buyers or sellers are in control.
Conclusion
In the stock market, the dynamic between buyers and sellers is key to driving price movements and executing trades. While buyers seek to acquire shares at favorable prices and sellers aim to dispose of their holdings, it is the interaction between their bid and ask prices that leads to successful transactions. By using tools like Level 2 data, Time and Sales, and volume indicators, traders can gain insights into market sentiment and understand who holds the upper hand—whether buyers or sellers—at any given time. Mastering these techniques can help investors and traders make more informed decisions and navigate market fluctuations effectively.
FAQ’s
To buy upper circuit shares, place a buy order through your broker. The order will only be executed if the price is below the upper circuit limit.
When you sell shares, a buyer in the market purchases them, with the transaction facilitated by the stock exchange.
Buyers and sellers are connected through the order book on the stock exchange, where their buy and sell orders are matched based on price.
