What is quoted price? Your complete guide in 2024

Understanding quoted price

A quoted price reflects the most recent transaction value of an asset like stocks, bonds, or commodities. It fluctuates throughout the day based on market events and perceptions of asset value. This price is the latest agreed-upon bid and ask prices between buyers and sellers. Displayed on electronic ticker tapes, it includes the stock symbol (like AAPL for Apple Inc. or TGT for Target Corporation), traded shares, price (in decimals), and indicates if it's a rise or fall from the previous quote, along with the price change amount. Trading typically occurs from 9:30 a.m. to 4 p.m. EST on major exchanges.

Understanding quoted prices and bid-ask prices

The quoted price signifies the latest mutual agreement between buyers and sellers, encapsulating the bid and ask prices.

Ask price

The bid price, which contrasts with the ask price, signifies the lowest amount a seller will accept for an asset. Conversely, the ask price, also known as the offer price, is always higher than the bid price.

The spread is the difference between the bid and ask prices and is indicative of a security's liquidity; less liquid stocks tend to have wider spreads, while highly liquid ones have narrow spreads, often just pennies apart or even fractions of a penny.

When a transaction occurs at a price higher than the previous one, both the bid and ask prices may increase for the next trade. The current price of a security reflects the last price at which it was traded, typically differing from the bid and ask prices.

Bid price

The bid price represents an investor, trader, or dealer's offer to buy a security, commodity, or currency. It's the maximum price a potential buyer is willing to pay to obtain the asset. Quote services and stock tickers typically show the highest bid price available for the security.

Unique factors to consider

Individuals managing their own portfolios often see quoted prices prominently displayed in a box on their online trading platform, making them easy to locate. Bid and ask prices are dynamic, especially for assets with high demand and substantial trading volume. Conversely, assets with low coverage and limited demand may experience minimal fluctuations in their quoted prices throughout the trading day.

Quoted prices in trading

Numerous parties track stock quoted prices, such as company executives, investor relations teams, significant investors, and individual retail investors. Traders, especially, closely monitor and forecast a security's quoted price to make trading decisions for either clients or personal accounts. Traders employed by financial institutions typically utilize the company's funds and credit for trading activities. On the other hand, independent traders operate without a fixed salary or bonuses from a larger organization, allowing them to retain all profits earned.