Quotations refer to the most recent sale price a stock, bond, or any other asset traded. In addition, most asset classes also quote the bid and ask price that determines the final sale price. The bid is defined as the highest price a buyer is willing to pay for the assets while the ask is the highest price a seller is willing to receive for selling. It's common for stable, liquid assets to record narrow bid-ask spreads in a normal trading environment. The pair will usually divert following systemic concerns like geopolitical events or broad market downturns. The onset of volatility and uncertainty moves the supply and demand mechanisms undermining quotations into flux. 

Breaking Down Quotation

Quotations represent two pieces of information for most asset classes: the price an investor would need to pay to purchase an asset at a particular moment in time (the lowest price "asked" by sellers) and the price an investor would receive for the same asset if they sold it at the same time (the highest "bid" by potential buyers). Together, the difference between the two represents the liquidity cost an investor incurs when trading an asset since they must buy at the bid price and sell at the asking price. As the price of an asset starts to fall, markets will see a concurrent divergence in the bid and ask prices. That wider spread can make assets less liquid and difficult to move during broad market volatility. 

Quotations aren't confined just to bid and ask prices. They also include high, low, open, and close values for a given day. A basic stock quote highlights these key data points to provide context around the current day's movements. The spread between the open and close or high and low is often a reflection of the ongoing trend. For example, sharp changes between the open and close signals strong upward momentum and an interesting trading opportunity. 

Other Types of Quotations

Most investors won't hesitate to connect the term quotation with stock prices, but many other asset classes record quotes of the last price traded. For instance, fixed income markets also quote the bid and ask prices of a bond during regular trading hours. In addition to bid-ask spreads, bond quotes showcase the asset's par value and yield to maturity. Par value is often converted to a numeric value and multiplied by 10 to determine the cost of a bond. Futures contracts and commodities also use quotes to provide investors and the finance audience relevant information about the asset.