Clearing Price

DEFINITION of 'Clearing Price'

The specified monetary value assigned to a security or asset. This price is determined by the bid and ask process of buyers and sellers interested in trading the security.

BREAKING DOWN 'Clearing Price'

In any exchange, sellers prefer to part with their assets for the highest price possible while investors interested in buying the same asset desire the lowest purchase price possible. At some point, a mutually agreeable price is reached between buyers and sellers. It is at this point that economists say the market has "cleared" and transactions take place. Thus, the clearing price of an asset is the price at which it was most recently traded.