What Is a Quoted Price?
A quoted price is the most recent price at which an investment (or any other type of asset) has traded. The quoted price of investments such as stocks, bonds, commodities, and derivatives change constantly throughout the day as events occur that affect the financial markets and the perceived value of various investments. The quoted price represents the most recent bid and ask prices that buyers and sellers were able to agree on.
Quoted Price Explained
The quoted prices of stocks are displayed on an electronic ticker tape, which shows up-to-the-minute information on trading price and trading volume. For most major exchanges trading hours are 9:30 a.m. to 4 p.m. EST. The ticker tape shows the stock (indicated by a three- or four-letter stock symbol – e.g., AAPL or TGT), the number of shares traded, the price they traded at (in decimal form), whether the quoted price represents an increase or decrease from the last quoted price, and the amount of the change in price.
Quoted Price and Bid and Ask Prices
The quoted price represents the most up-to-date agreement between buyers and sellers, or the bid and ask prices. The bid price is an offer that an investor, trader or dealer makes in order to purchase a security, commodity or currency. On the flip side, the bid is the price a seller is willing to accept. An ask is also often referred to as the offer. The difference between the bid and the ask is the spread. When a purchase fills at the bid price, both the bid and the ask may move higher for the next transaction, based on demand.
For individuals that are trading their own portfolios, quoted prices are often displayed in a rectangle in an easy-to-spot location on their online trading platform. The bids and asks are constantly moving if the security is in high demand and trading with a large volume. If the security is not well covered and does not have significant demand, the quoted price may not move much up or down over the course of the trading day.
Quoted Price and Traders
Many stakeholders follow the quoted prices of stocks, including company management, the investor relations team, major investors, and retail investors. Traders, in particular, are constantly watching and predicting a security’s quoted price in order to place bets for their clients or their own accounts. When a trader works for a financial institution, they generally trade with the company's money and credit. Alternatively, a trader may work independently, in which case they would not receive the same salary and bonus as for a larger entity but are able to keep all of the profit.