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In all the online articles I read, it was written that while placing a market order in an order driven market, trade gets executed either at the lowest ask or the highest bid.

But when we go to buy or sell, we get only one price or when we search price of a stock we get only one value. Which price is this and how's it calculated?

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    Does this answer your question? Help me understand how the stock price works Jun 18 at 8:50
  • No, it doesn't. I basically want to ask why do we see only one price of stock because the lowest ask and highest bid could be different when buying price=lowest ask and selling price =highest bid
    – Amogh
    Jun 18 at 9:22
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I basically want to ask why do we see only one price of stock because the lowest ask and highest bid could be different when buying price=lowest ask and selling price =highest bid

For simplicity. First, for liquid stocks the bid and ask are very close. It is so much easier to understand that Foobar Corp trades at 10 instead of listing it trading at 9.99/10.01 wich the bid/ask. Second, most people are not interested in how the market actually works. They just want to get a rough gauge of the current level for a stock. Even more so if you consider that tiny fluctuations are often greater than the bid-ask-spread (for liquid stocks).

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But when we go to buy or sell, we get only one price or when we search price of a stock we get only one value. Which price is this and how's it calculated?

It is usually the last trade price (i.e. the price that the latest transaction took place at). When markets are closed (after-hours, weekends, or holidays), the price you see is usually the closing price of the latest trading day.

For example, here is the price of Microsoft Corporation (NASDAQ: MSFT) as shown on Yahoo Finance:

MSFT price

At the moment, the US stock markets have not yet opened, so the $260.90 price is yesterday's (2021-06-17) closing price of MSFT.

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