What is Current Price
The current price is the actual selling price of a security trading on an exchange, as well as the most recent price of a security listed in an investment portfolio. In the case of a bond, a bond's current price will often be quoted as 10% of the par value of $1,000. A bond that currently trades at $99 is really priced at $990. Current price also refers to the present value of a stock, currency, commodity, stamps or a precious metal.
BREAKING DOWN Current Price
The current price, also known as the market value, is the price at which goods are currently being sold in the market. Similar to market price, which is the price determined by buyers and sellers in an open market, the current price of a security is the price at which a security last traded. In that regard, the current price can function as a baseline when estimating the price a buyer would be willing to pay and the seller would be willing to accept for a subsequent transaction involving the purchase and sale of the same security.
Current Price on Stock Exchanges
On a stock exchange, the current price of a security is determined by the last amount that was paid by an investor during a trade. The current price does not dictate the next sale price because changes to the supply and demand associated with the security will shift prices accordingly.
Often, the current price can be used as an indicator to estimate what would be considered a fair price in the open market, but this is not a guarantee that any subsequent transactions will be completed at that price.
Current Price in Over-the-Counter Trades
When a security is listed over the counter instead of on an exchange, the current price is based on the current bid price listed by buyers and the current ask price listed by sellers. Considered dynamic in nature, the current price in an OTC trade fluctuates based on the supply and demand.
Current Price in the Bond Market
A bond’s current price is determined by comparing the current interest rate to the interest rate associated with the bid. The face value is then adjusted based on the remaining interest payments due until the bond reaches maturity. The closer a bond is to maturity, the closer the current price will be to the face value listed on the bond.
Current Price in Retail Environment
Within a retail environment, the current price reflects the amount actively being charged to customers at that moment. This can be separate from the retail price, such as where an item is on sale, and can fluctuate depending on the store from which the item is purchased.