What is a Quoted Price? – Definition and Example


Quoted price is the most recent transaction price of an asset, whether it’s stocks, bonds, commodities, or derivatives. It constantly fluctuates during the trading day in response to market dynamics. This price represents the agreement reached between buyers and sellers and includes both the bid and the ask price.

The estimate provided to offer products or services is known as the quoted price in other financial transactions. The buyer must offer to pay the difference if the actual price exceeds the listed price, and the seller must justify the extra.

Quoted price in a nutshell

  • Quoted price reflects the latest transaction value of an asset, responding to market changes.
  • Components include bid price (buyer’s maximum offer) and ask price (seller’s minimum offer), forming the bid-ask spread.

Understanding Quoted Prices

Quoted prices are essential for letting investors know how much a security costs. Sometimes, the material in a quoted price is incomplete. For instance, it might not say which market participants are offering or bidding for the security, whether limit orders are in place, or the number of prospective trades at a specific price. 

To put it another way, quoted prices prevent the observer from seeing the “order book that details who are interested in stock and at what price. However, reported prices provide investors and dealers with a general notion of how an asset performs.

Components of a Quoted Price

The quoted price of a financial instrument consists of two main components: the bid price and the ask price.

  • Bid Price: This is the highest price at which a buyer is willing to purchase the asset. It represents the demand side of the market.
  • Ask Price: Also known as the offer price, this is the lowest price at which a seller is willing to sell the asset. It reflects the supply side of the market.

The difference between the bid and ask prices is called the bid-ask spread. This spread represents the transaction cost involved in trading the asset and serves as a source of profit for market makers and brokers.

How can you figure out a bond’s advertised price?

You can use the stated price formula to determine the worth of a bond. It can be easily calculated by dividing the bond’s par value by its quoted percentage. For instance, a bond with a par value of $1,000 and a market price of $120 will have a bond value of $1,200.

Where can you find a stock’s listed price?

Recent stock quote prices are available on numerous online trading systems, economic websites, and mobile apps. Some of them even permit free user access to these data. The trader has a better chance of making a winning trade by analyzing the price of a stock.

Conclusion

Quoted stands for the most recent consensus evaluation of an asset’s value, as shown in the current bid and ask prices. The stated price is the current, live cost of the equity or product. From the reported price, you may not be able to determine which markets are offering to buy or sell the equities, but you can get a general idea of how the stock is performing. You can carefully select a stock that will benefit you the most by looking at the offered price.

About the author

Percival Knight
Percival Knight is an experienced Binary Options trader for more than ten years. Mainly, he trades 60-second trades at a very high hit rate. My favorite strategies is by using candlesticks and fake-breakouts

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