Why do prices move at all?

In Unit 1 you saw that a price is just the last agreement between a buyer and a seller. But step back and ask the deeper question: why do those agreements keep changing, thousands of times a minute, even when the company itself does nothing all day?

Markets trade the future, not the present

Here is the core insight, worth the whole course: a share's price is the market's live estimate of everything the company will earn in the future, compressed into one number today.

The factory didn't change since yesterday. But beliefs about the future change constantly:

• an analyst revises next year's sales forecast;
• a rival announces a competing product;
• a central bank hints that borrowing will get cheaper;
• a fund needs cash and sells, price-insensitive, today.

Each belief-shift nudges someone's "fair number" for the future — and they trade on it. Millions of these nudges per day ARE the wiggle you see on charts.

Expected vs unexpected — the market's favorite distinction

A company can report record profits and its stock can FALL the same morning. Beginners find this maddening; you won't, because you know the secret: if the record was already expected, it was already in the price. Only the gap between expectation and reality moves prices. That's why earnings season is measured in "beats" and "misses," not absolute numbers.

What this means for your expectations

Since prices already contain the crowd's knowledge, consistently predicting short-term moves means consistently out-guessing that entire crowd — something even most professionals don't achieve (remember the index-fund fact from Unit 3). This isn't a reason for despair; it's the honest starting point that separates education from hype.

In the data

The belief-shift this lesson describes is recorded. Analysts' average forecast of a company's earnings per share, the consensus, is kept as it stood today, a week ago, a month ago and further back, for the same future period. Here is Apple's, for its furthest fiscal year the analysts cover:

Read it top to bottom, oldest estimate first: the consensus moving while the company itself reported nothing. The last row says how many analysts that consensus is made of — about forty for Apple, and often single digits for smaller companies.

Try it now

1. Find the next report date in a company's earnings calendar — mark it. Apple's 2026 reports are below. The fourth, due on the date shown, was still to come on 29 September 2026: it carries an expected figure and no actual one yet. For your own anchor company, open it in the Terminal and change the symbol there.

Open AAPL.US in the EODHD Terminal

2. Now measure a belief moving while nothing happened. In the consensus table above, subtract the estimate thirty days ago from the estimate now. That difference, in cents per share, is thirty days of analysts changing their minds about a year the company has not reported yet — the only thing that moved was the expectation.
3. Divide it by the estimate thirty days ago to get the drift as a percentage, then read the number of analysts beside it. A big drift agreed by forty analysts and the same drift from three are not the same fact, and the second number is the one that tells you which you are holding.
4. Then look at a settled report: Apple's of 30 July 2026, below, with its surprise, actual earnings against expected, in per cent. It came out after the close, so the price's answer is the next morning: the second table is the session of the report and the session after it. Compare the second day's open with the first day's close. Did the direction of the surprise explain the move — and if not, what does that say about what the crowd had expected? You're now reading markets the way professionals do: through expectations.

Build it yourself

Watch it happen on your own instruments, in a tool you built. First data on screen, and the meter that shows what it cost