Market Versus Quote - MVQ

Dictionary Says

Definition of 'Market Versus Quote - MVQ'

A comparison between the last price at which a security traded and the most recent bid and ask prices. MVQ comes up when the bid price is the price at which a buyer is willing to purchase a security; the ask price is the price a seller is willing to accept for a security. Usually the best bid and ask prices will be close to the market price, but occasionally, particularly in a thinly-traded security, the market price can differ significantly from the bid-ask price. Securities that trade under high volume and with greater liquidity typically have a smaller market versus the quote value. Conversely, securities that are illiquid will generally have a larger market versus the quote value.
Investopedia Says

Investopedia explains 'Market Versus Quote - MVQ'

A trading instrument's market versus quote value can provide an indication of the type of liquidity under which the instrument trades. Higher values can signal a thinly-traded instrument that may be more challenging to trade; smaller values may identify instruments that trade under high volume and good liquidity, making them ideal candidates especially for active traders and short-term traders. For example, assume that stock ABC last traded at $42.50 per share and the current bid-ask prices are $42.48 and $42.52, respectively, has a MVQ value of 2 cents, considered a small value and indicating a liquid instrument. Stock XYZ, on the other hand, last traded at $42.50 but has bid-ask prices of $41.50 and $43.50 has a MVQ value of $1, considered a large value and indicating an illiquid trading instrument.

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Related Definitions

  1. Ask

    The price a ...
  2. Bid

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  3. Bid-Ask Spread

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  4. Illiquid

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  5. Quote

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  6. Risk

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  7. Universe Of Securities

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  8. Arithmetic Mean

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  9. Fundamental Analysis

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