Market Versus Quote - MVQ

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.

BREAKING DOWN '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.

RELATED TERMS
  1. Bid And Asked

    A two-way price quotation that indicates the best price at which ...
  2. Bid Price

    The price a buyer is willing to pay for a security. This is one ...
  3. Best Bid

    The highest quoted bid for a particular trading instrument among ...
  4. Best Ask

    The lowest quoted offer price among all those offered by competing ...
  5. Thinly Traded

    An asset that cannot easily be sold or exchanged for cash without ...
  6. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
Related Articles
  1. Investing

    Negotiating the Bid

    A bid is an offer investors make to buy a security.
  2. Markets

    How Bid Price Affects Liquidity

    The bid price is the amount a buyer will pay for a security.
  3. Trading

    What Does Bid And Asked Mean?

    Bid and asked is a two-way price quotation.
  4. Markets

    Stock Quotes Explained

    Curious about how stock quotes are compiled and what a trader should know about how? Read on.
  5. Markets

    Understanding Financial Instruments

    Financial instrument is a general term used to describe a monetary asset.
  6. Investing

    Disadvantages of Pairs Trading

    Aside from the risks associated with pairs trading, there are a number of disadvantages to this investment technique of which traders should be aware. Perhaps the most obvious disadvantage is ...
  7. Investing

    How To Calculate The Bid-Ask Spread

    It's very important for every investor to learn how to calculate the bid-ask spread and factor this figure when making investment decisions.
  8. Markets

    Understanding Gold Quote Prices

    Willing to trade gold but puzzled by gold price quotes and terminology? Investopedia explains how to read gold price quotes.
  9. Markets

    Understanding Liquidity Risk

    Learn about the two types of liquidity risk: funding liquidity risk and market liquidity risk.
  10. Markets

    Top Day Trading Instruments

    Day trading is an intense and often appealing activity. Investopedia provides the list of top financial instruments for day trading.
RELATED FAQS
  1. What are the determinants of a stock's bid-ask spread?

    Stock exchanges are set up to assist brokers and other specialists in coordinating bid and ask prices. The bid price is the ... Read Answer >>
  2. What does the variance between the bid and ask price of a stock mean?

    Find out how stocks are traded in the market, why the bid and ask prices are different and why the bid-ask spread is smallest ... Read Answer >>
  3. What number of shares determines adequate liquidity for a stock?

    Liquidity refers to how easy it is to buy and sell shares without seeing a change in price. If, for example, you bought stock ... Read Answer >>
  4. I don't understand how a stock has a trading price of 5.97, but when I buy it I have ...

    It might seem logical that the last traded price of a security is the price at which it would currently be trading, but this ... Read Answer >>
  5. What do the bid and ask prices represent on a stock quote?

    Learn what the bid and ask prices mean in a stock quote. Find out what represents supply and demand in the stock market and ... Read Answer >>
  6. What types of stocks have a small difference between bid and ask prices?

    Learn more about bid-ask spreads and why stocks with high levels of liquidity and low levels of volatility usually have narrow ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center