Stock Market Chart and Price Jargon Revealed | Bizcovering Tree...

Stock Market Chart and Price Jargon Revealed | Bizcovering

Tree Shakes – if you hold shares in a company and the price starts to drift downwards, you need to check two things. Firstly check the date and make sure it is not ex-dividend day – your share price will drop by the same amount as the dividend, and this is fine.

Secondly, scour the news for reasons why the sp might be dropping. If you can’t find any good reason, then the chances are that you are witnessing a “tree shake”. When a market maker is trying to fill a large institutional buy order, sometimes they may not have enough shares. They start to gradually drop the share price in order to “scare” people into thinking the company has a problem.

Weak holders will sell up, and the market maker continues to drop the price until enough weak holders have relinquished their shares. The market maker then fulfils its large order and returns the share price to where it started. Be eagle-eyed for all news relating to companies you hold shares in, and you’ll be better able to spot tree shakes and not get caught out.