# What does a stock's quoted value represent?

According to Yahoo Finance, a single stock in Alphabet Inc. is worth 898.7 USD as of this writing.

Question: What does the price of \$898.7 reflect? I can imagine the price is one of the following options:

1. Highest bidding price
3. Price for the latest transaction
• the question as asked, answered, and accepted doesn't really match the title.
– user12515
Commented Jul 4, 2017 at 20:41
• Feel free to suggest a different title. Commented Jul 4, 2017 at 20:42

The quote price is simply the last price at which a trade completed.

• So what prohibits a company from purchasing its own stock a 2x the price to artificially bump quote price?
– Phil
Commented Jul 4, 2017 at 18:59
• @Phil: The law. Commented Jul 4, 2017 at 19:10
• @Phil I think Lighntess is overcomplicating it. The company can buy its own stock at 2x the value, but other sellers will still be selling it at the regular price. If you are a random buyer, who are you going to go with? The seller selling at the normal rate or the seller selling at 2x rate? Commented Jul 4, 2017 at 19:50
• @Phil: Generally, a lack of cash. A company with \$100 million in outstanding stocks usually doesn't have \$200 million available. Commented Jul 5, 2017 at 7:53
• @Phil Why would they waste their money doing that? An increase in the quoted stock price has no benefit to the company. (An increase in the price at which you can actually sell the stock benefits it when issuing new stock, or when employees cash in share options, but artificially boosting the quoted price in the way you suggest will have no effect on the price you can actually get for the stock.) Commented Jul 5, 2017 at 13:01

Price for the latest transaction. If the stock is selling for \$898.7 means that the stock is currently trading for \$898.7, and it will be your ask price of stock if you purchase currently.

• I am not sure your last comment, "... it will be your ask price of stock if you purchase currently" is necessarily correct. It is possible that the latest transaction occurred at 898.7, but the current lowest ask price might now be 900 [because all shareholders offering 898.7 to sell their shares have been bought out at that price, and no other current offers exist until 900]. This is why it is important to note all of the ask price, bid price, and latest transaction price. Commented Jul 4, 2017 at 17:12
• Why bold when 1/3 of the words in your answer are bold?
– quid
Commented Jul 5, 2017 at 14:41
• @quid: It's very bold of him Commented Jul 6, 2017 at 1:15

Stock price is set to the price with the highest transaction volume at any given time.

``````price x no of stocks traded
``````

The stock price you cited was only valid in the last transaction on a specific stock exchange. As such it is more of an "historic" value. Next trade will be done with the next biggest volume. Depending on the incoming bids and asks this could be higher or lower, but you can assume it will not be too far off if there is no crash underway.

Simple example stock exchange:

``````Buyer A wants 20 for max   \$400
Buyer B wants 10 for max   \$900
Buyer C wants  2 for max \$1,000

Seller A offers  5 for min \$700
Seller B offers  5 for min \$900
Seller C offers 30 for min \$950

Price will be \$900 at which 10 stocks can be traded = trade volume \$9,000
If it was \$899 only 5 could be traded = \$4,495
If it was \$901 only 2 could be traded = \$1,802
``````