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So I am doing digital assets trading. Which is very interesting way to make some money (and at the very least cover the inflation rate). The trading itself with all different options is quite clear. However I struggle to understand how exactly market price is calculated.

To elaborate - below is the screenshot of a buy/sell orders on one of the markets. You can clearly see that the lowest asking price is 226.950 (EUR), where as the highest bid is 226.430 (EUR). However the calculated market price is always somewhere in between of that (in this case it is 226.440 EUR).

My question is how is the market price determined based on highest bid and lowest ask? Is there any universal algorithm to that? Or is it up to market (software in this case) to decide how to calculate this?

enter image description here

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    Are you sure it is displaying Market price rather than last traded price? In most stock exchanges the market price will be 226.950 or 226.430 depending on the whether the market trade is for bid or ask.
    – Dheer
    Sep 14, 2017 at 7:59
  • @Dheer I didn't say it is stock market. It is digital assets market so it may be different (IDK that). But this is what they show as "market price" on this and a few other similar platforms. Which actually made me curious about how they get the number. Sep 14, 2017 at 8:08
  • Is there a screen/function that lists the most recent trade(s) to see whether or not this is the "last-trade price" being shown?
    – TripeHound
    Sep 14, 2017 at 11:19
  • @TripeHound can't see anything like that. Sep 14, 2017 at 11:20
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Market price simply depends on your order side. If you are placing a buy order the market price is the lowest ask, if you are placing a sell order the market price is the highest bid. If your order is larger than the volume then you'd need to also consider the next lowest ask or next highest bid until you've fulfilled your order volume.

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  • And when I am not placing any type of order and only look at the field of market price on the web page, which one is it then? I think what you are saying not really answering my question. Sep 14, 2017 at 19:43
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    @AlexKey The price displayed is, generally, the last transacted price and, generally, either displayed in red or green to indicate the side of the transaction. There is no "calculating" involved for market price.
    – quid
    Sep 14, 2017 at 20:11

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