ExtZy works just like any other market - 'buy low, sell high'.

Initially, when a stock is listed on the ExtZy market, a calculation is made based on about a week's worth of data on the number of hits the site gets compared to the market overall and an initial offer price per share is created.  Players can buy up to 200 shares in that stock for that price, until there are none left on the market, after which the question of 'price' gets interesting!

Anyone who owns shares can now place an offer to sell - at whatever price they think (perception) someone will buy for the stock. So if they bought it for 10 points a share, there are none left at that price, and they think that the stock (the web-page and whatever content is on it) is going to rise in popularity, they can list an 'offer to sell' for 11, 13 or 15 points.

The important detail is 'offer' to sell - there's no guarantee that anyone will buy it, so whatever the price is needs to match someone else's perception of its value before the sale is concluded, and the shares exchange for that value in points.  The market itself - and players' perceptions of the sum of its value - defines what a stock's real value actually is.

Dips, Falls, Rallies, and Corrections

So looking at our graph again on the ExtZy front-page and the 'dip' in the market on 10 March, we can understand a bit better what we were seeing happen there.  The value of the market before the dip was just over 100,000 points.  Up until that time, players who owned shares made offers to sell some of them at prices above (or below) what they purchased them for.  On or about 10 March, another player either saw an offer (or offers) at a bargain and decided to buy - dropping the average of the price on the market and creating the 'dip'.  A few days later, another player completed a sale of stock that was higher than its average market value, driving the overall market (and the line on the graph) back up.

Again, there can be (and are) lots of offers out there, on lots of stocks, for lots of different prices - that's the market.  The average of the actual sales of those shares - that's the value.

Smart traders know - and make use of - the difference!

 


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