This is what the structure of the stock market looks like:

Centralized Financial Market

Centralized Market

The stock market is a centralized market where buys and sellers go to a central place.

Because of this, the stock market tends to be very monopolistic.

There is only one entity, one specialist that controls prices.

All trades must go through this specialist. Because of this, prices can easily be altered to benefit the specialist and not traders.

How does this happen?

Market Specialists

In the stock market, the market specialist must fulfill the order of their clients. Now, let’s say the number of sellers suddenly exceeds the number of buyers.

The specialist, which is forced to fulfill the order of its clients, the sellers, in this case, is left with a bunch of stock that he cannot sell-off to the buyer side.

In order to prevent this from happening, the specialist will simply widen the spread or increase the transaction cost to prevent sellers from entering the market.

In other words, the specialists can manipulate the quotes it is offering to accommodate its needs.