Price Discovery

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DEFINITION of 'Price Discovery'

A method of determining the price for a specific commodity or security through basic supply and demand factors related to the market.

BREAKING DOWN 'Price Discovery'

Price discovery is the general process used in determining spot prices. These prices are dependent upon market conditions affecting supply and demand. For example, if the demand for a particular commodity is higher than its supply, the price will typically increase (and vice versa).

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