Question

How does a marginal investor set the market price?

Answer 1

Marginal investors can be called as the investors who set the market price of the share. Here what is happening is that the marginal investors will buy the shares at dip and makes a trend and others will follow this. So the final result or outcome is that the price level is considered as what the marginal investor trade. Here he will decide the trend and set the price level of particular stocks. Here the marginal investors will trade on margins so that they can influence the share price. This is how they are setting the stock price.

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