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What Is a Quote?
Let me tell you directly: a quote is the last price at which an asset traded; it's the most recent price that a buyer and seller agreed on and where some amount of the asset actually changed hands.
The bid quote is the most current price and quantity at which you can buy a share. It shows the price and quantity a current buyer is willing to purchase the shares for. The ask quote shows what a current participant is willing to sell the shares for.
You might also hear a quote referred to as an asset's 'quoted price.'
Key Takeaways
- A quote is the last price at which an asset traded; it is the most recent price that a buyer and seller agreed upon and at which some amount of the asset was transacted.
- The bid quote is the most current price and quantity at which a share can be bought.
- The ask quote shows what a current participant is willing to sell the shares for.
- Investors typically reference the historical quotes for an asset in order to examine potential trends in a security’s market activity and volatility.
- Quotes may be provided by a variety of outlets; investment news sites and trading platforms both provide quotes.
Understanding Quotes
Quotes for assets change throughout the trading day as new transactions happen one after another in a continual stream of trades.
When you reference a stock quote for a given company, it represents the most recent price at which a trade was successfully executed for that particular security. However, if you're a potential investor or seller, you'll be more concerned with the bid quotes and ask quotes than the stock quote itself, because they reflect the prices at which you can actually buy or sell the stock; the stock quote just shows the price at which it traded most recently.
You should reference historical quotes for an asset to examine potential trends in a security’s market activity and volatility. Quotes can be represented in relation to a specific instance of time, allowing you to make comparisons across comparable periods. For instance, you might look at quotes from the same day but one year apart to chart the potential trajectory for the security. You could also compare quotes across a single day of trading, especially if there's volatility, to develop your investing strategy in response to the activity.
Quotes come from a variety of outlets; investment news sites and trading platforms both provide them. There may be a delay in the reporting of such quotes, especially from free services that are publicly available. Trading and investing platforms may offer quotes as close to real-time as possible as part of a service to their paid subscribers. This can be crucial if you want to make decisions on your trading activity as soon as quotes become available.
Investing platforms often let you set up quote-driven alerts that get sent when shares cross certain thresholds. These notifications can also trigger an automated response. For example, you might put a sell order in place that's contingent on receiving a quote that shares of a security have reached a desired threshold.
