Price Continuity

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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.

INVESTOPEDIA EXPLAINS '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. Ask

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  2. Bid-Ask Spread

    The amount by which the ask price exceeds the bid. This is essentially ...
  3. Bid

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

    A market with many bid and ask offers, low spreads and low volatility. ...
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  6. Market Depth

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