What Is a Quoted Price?
Let me tell you directly: a quoted price is the most recent price at which an investment or any other type of asset has traded. You see, the quoted price for things like stocks, bonds, commodities, and derivatives shifts constantly throughout the day as events impact the financial markets and how people perceive the value of these investments. This quoted price stands for the latest bid and ask prices that buyers and sellers have agreed on.
Key Takeaways
- A quoted price of an investment or asset is the most recent bid and ask prices that buyers and sellers agreed upon.
- The electronic ticker tape shows the quoted price for a stock, along with the stock symbol, the number of shares traded, the price traded at, an indication of an increase or decrease from the last quoted or closing price, and the amount of price change.
- The bid price represents the highest price a prospective buyer is willing to pay for a security, commodity, or currency.
- The ask price, also referred to as the offer price, represents the lowest price a seller will accept for an asset or security.
- The bid-ask spread is the difference between the bid price and the ask price; liquid assets that can be bought and sold easily will have a small bid-ask spread.
Understanding a Quoted Price
You need to know that quoted prices for stocks appear on an electronic ticker tape, which provides up-to-the-minute details on trading price and volume. For most major exchanges, trading hours run from 9:30 a.m. to 4 p.m. EST.
On the ticker tape, you'll see the stock indicated by a one- to four-letter symbol—like AAPL for Apple Inc. or TGT for Target Corporation—along with the number of shares traded, the price in decimal form, whether it's an increase or decrease from the last quoted price, and the amount of that change.
Important Exchanges
Keep in mind that some of the world's most prominent exchanges include the New York Stock Exchange (NYSE), the Nasdaq, the London Stock Exchange (LSE), and the Tokyo Stock Exchange (TSE).
Quoted Price and Bid and Ask Prices
The quoted price is essentially the most current agreement between buyers and sellers, tied directly to the bid and ask prices.
Bid Price
Here's what the bid price means: it's an offer from an investor, trader, or dealer to buy a security, commodity, or currency. This is the highest price a buyer is ready to pay for that asset. Services and tickers usually show the highest available bid price for the security.
Ask Price
On the other side, the ask price is the lowest amount a seller will take for an asset or security—it's also called the offer price and is always higher than the bid. The spread is the difference between bid and ask, and it tells you about the security's liquidity. Stocks with low liquidity have wide spreads, while highly liquid ones have small spreads, sometimes just pennies or less.
When a trade happens at a higher price than the last one, both bid and ask might shift higher for the next deal. Remember, a security's current price is the last paid price, which often differs from the bid and ask.
Special Considerations
If you're trading your own portfolio, you'll often find quoted prices in a clear rectangle on your online platform. Bids and asks move constantly for high-demand, high-volume securities. But for those without much coverage or demand, the quoted price might stay pretty steady throughout the day.
Quoted Price and Traders
Many people track quoted prices, including company management, investor relations teams, major investors, and everyday retail investors. Traders especially watch and predict these prices to place trades for clients or their own accounts. If a trader is with a financial institution, they use the company's money and credit. If independent, they don't get the same pay structure but keep all profits.
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