DEFINITION of 'Price Continuity'

A characteristic of a liquid market where the price movements between transactions are relatively small. Each trade results in minimal price changes, as if the proceeding price continued through to the next transaction.

BREAKING DOWN 'Price Continuity'

Price continuity represents the depth in a market, indicating a large number of buyers and sellers for a security. Each buyer and seller will have a bid and an ask, which represent the prices at which traders will buy or sell a stock. The bid-ask spread usually tightens with a large number of buyers and sellers, so the range in which a security will trade narrows. A narrow trading range will produce a high degree of price continuity.

RELATED TERMS
  1. Bid And Asked

    A two-way price quotation that indicates the best price at which ...
  2. Thin Market

    A market with a low number of buyers and sellers. Since few transactions ...
  3. Clearing Price

    The specified monetary value assigned to a security or asset. ...
  4. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  5. Negotiated Market

    A type of secondary market exchange in which the prices of each ...
  6. Volume

    The number of shares or contracts traded in a security or an ...
Related Articles
  1. Investing

    Negotiating the Bid

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

    The Ins And Outs Of Seller-Financed Real Estate Deals

    There's more than one way to buy or sell a house. Seller financing presents yet another unique option.
  3. Investing

    How Bid Price Affects Liquidity

    The bid price is the amount a buyer will pay for a security.
  4. Investing

    Ins And Outs Of Seller-Financed Real Estate Deals

    Seller financing works like this: Instead of a buyer receiving a loan from a bank, the person selling the house lends the buyer the money for the purchase.
  5. Investing

    Arm's Length Transaction

    An arm’s length transaction describes business deals in which the buyer and seller act independently and with no interest in the other’s benefit.
  6. Investing

    What is a Financial Market?

    “Financial market” is a broad term used to describe any forum where buyers and sellers meet to trade assets.
  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. Insights

    Stock Quotes Explained

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

    Understanding Liquidity Risk

    Make sure that your trades are safe by learning how to measure the liquidity risk.
  10. Trading

    The Basics Of The Bid-Ask Spread

    The bid-ask spread is essentially a negotiation in progress. To be successful, traders must be willing to take a stand and walk away in the bid-ask process through limit orders.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. What's the difference between bid-ask spread and bid-ask bounce?

    Understand the difference between the bid-ask spread that determines the buy or sell price for a stock and a bid-ask bounce, ... Read Answer >>
  5. 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. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  2. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  3. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  4. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Four Percent Rule

    A rule of thumb used to determine the amount of funds to withdraw from a retirement account each year. The four percent rule ...
Trading Center