From my understanding, a security's prices are published by the exchange on which it is trading. How do the exchanges determine what price to publish? Is the displayed price simply the latest fill price, or is it calculated by some other method? (I assume it is not the latest fill price, because if it were, I would not expect a security's price chart to be continuous.)

  • 1
    Why shouldn't it be the latest fill price? If you want to know what the price is now you look at the latest fill price now. – RonJohn Jan 2 at 5:22
  • Ah, my reasoning (about continuity) in my question is faulty. I guess what I was getting at was something like the following: Suppose a stock's displayed price is $10.00. If, say, a bank came in and bought a bunch of shares at $10.10, then if the stock's displayed price was determined by the latest fill price, then the displayed price should change to $10.10. However, at this point I'd expect the order book to still be around $10.00, maybe a bit higher (bidders and askers cannot react instantaneously). So therefore I'd think in this scenario displaying a price of $10.10 would be "inaccurate". – Tony Bai Jan 3 at 7:29
  • There's always some lag between the the buy price and when it's reported, much less reported across the country. Is that what you mean? – RonJohn Jan 3 at 7:31
  • Not really. Now that I think about it more, I think the reasoning behind my original conclusion that it can't be the latest fill price is just incorrect. Thanks for your response! – Tony Bai Jan 3 at 7:36

A current quote from the stock exchange includes the following data points:

Bid Price

  • The highest posted price someone is willing to buy an asset

Bid Size

  • The number of shares or contracts that people are trying to buy at the bid price

Ask Price

  • The lowest posted price someone is willing to sell an asset. Also called the "offer price."

Ask Size

  • The number of shares or contracts being sold at the ask price

Last Price

  • The price at which the last transaction occurred

Last Size

  • The number of shares or contracts involved in the last transaction

The market is an auction and there are additional orders at lower bid and higher ask prices on the order book. As orders at current price are taken out, the next order on the order book becomes the new quote, depending on whether price is moving up or it is dropping. An example of this is:

enter image description here

  • 1
    When I look up the price of a stock on Google, and Google returns a chart from an exchange, I get a single price. How is this single price determined? Is it the last price, or perhaps the midpoint between the highest bid and lowest ask? Also, do you happen to have a source for the various components of the quotes that stock exchanges publish? – Tony Bai Jan 3 at 7:22
  • 1
    Google is providing the last traded price. During trading hours, some brokers will provide the midpoint as the quote but that is more the exception rather than the rule. Yahoo Finance provides the data points that I mentioned but I believe that it is delayed during trading hours. If you google "real time stock quotes", you should find some other sources. – Bob Baerker Jan 3 at 13:16

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.