Quoted Price

Quoted Price: Definition and What It Tells You

A quoted price is the most recent price at which an asset has traded—reflecting the latest agreement between buyers and sellers. It applies to stocks, bonds, commodities, currencies, and derivatives and fluctuates continuously as market conditions and participants’ valuations change.

How Quoted Prices Appear

Quoted prices for publicly traded securities are shown on electronic ticker displays. A typical quote includes:
* The stock symbol (ticker)
* The most recent trade price (the quoted price)
* Trading volume or number of shares traded
* Whether the price moved up or down and by how much

Major exchanges where quotes originate include the New York Stock Exchange (NYSE), Nasdaq, London Stock Exchange (LSE), and Tokyo Stock Exchange (TSE).

Bid, Ask, and Spread

Understanding the components behind a quoted price is essential:

• Bid price: The highest price a buyer is willing to pay for the asset.
• Ask price (offer price): The lowest price a seller will accept.
• Spread: The difference between the ask and the bid.

The quoted price often represents the most recent trade price, which may differ from the displayed bid or ask.

Liquidity and Its Effect on the Spread

Liquidity describes how easily an asset can be bought or sold without significantly affecting its price.

• Highly liquid assets: Narrow spreads (often pennies or fractions of a penny), frequent price updates.
• Low-liquidity assets: Wider spreads and less frequent movement in quoted prices.

When trading volume is high, bids and asks move quickly. In thinly traded securities, quoted prices may remain static for longer periods.

Practical Implications for Investors and Traders

• Execution: Market orders fill at available bid or ask prices; large spreads can increase transaction costs.
• Price discovery: Quoted prices provide real-time signals about market sentiment and perceived value.
• Strategy: Traders watch quoted prices closely to time entries and exits; retail investors should be aware of spreads and liquidity before placing orders.
• Platform display: Online trading platforms typically highlight the quoted price and accompanying bid/ask information for easy visibility.

Summary

The quoted price is the freshest market price reflecting a completed trade and is supported by bid and ask quotations that show buyers’ and sellers’ willingness. Spread and liquidity are key factors that influence trading costs and price behavior. Monitoring quoted prices helps both traders and investors make informed execution and valuation decisions.