Mana asked in Business & FinanceInvesting · 1 month ago

About the stocks(Volume and Price)?

I am a beginner about stocks and living in Thailand

When I buy the stock, if the price is 500Bath(20$)

Volume: 100 Price: 5.00

Volume: 500 Price: 1.00

Both are 500Bath right, so I don’t really know what is the difference

Which one is better?

3 Answers

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  • kswck2
    Lv 7
    1 month ago
    Favorite Answer

    The answer can be as simple or as convoluted as you want it to be. 

    The price of a stock SHOULD reflect the value of the company divided by the amount of shares in circulation. Unfortunately that is often untrue, due to many different factors. 

    Volume has little to do with the price of a stock. So a 5.00 stocks is not better then a 1.00 stock, regardless of the volume. 

    To put it more simply: You hear a lot about Cheap stocks. This does Not mean the price is low, rather it means that the price reflects the value of a company very well. 

    Take companies like Tesla and Amazon. Tesla is $826, Amazon is $3.104. Which one is the Cheapest stock? Amazon. Why? Because its price better reflects the sustainable value of the company. The price of Tesla is way more expensive since its value is being guessed, based on an unproven technology, and a LOT of hype. 

    Sometimes you will see a P/E Ratio. Price to earnings. The Lower that number, the more fairly the stock is priced. Amazon's P/E ratio is 34, Tesla's is 1,579, which was nearly unheard of, until tech companies started appearing. 

  • Steve
    Lv 6
    1 month ago

    How many shares are bought and sold (the volume) on a given day isnt the way anyone should evaluate a stock and maybe buy it. I have this to say, though. You live in Thailand. I live in The USA. The buying and selling habits of its citizens may be and probably are well apart. Anyhow, in The USA, a stocks price isnt always indicative about how the stock will do in the future. You should look at the fundamentals of the stock such as their debt, share count, analysis, institutional holding, etc. So the $5 stock isnt necessarily any better or worse than the $1 stock. Again, look at its fundamentals. 

  • 1 month ago

    The volume just reflects how big the company is. The price is just what people are willing to pay for it on the open market. These two factors by themselves are irrelevant. 

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