What Is a Quote?
A quote is the last price at which an asset traded; it is the most recent price that a buyer and seller agreed upon and at which some amount of the asset was transacted.
The bid quote is the most current price and quantity at which a share can be bought. The bid quote shows the price and quantity of which a current buyer is willing to purchase the shares. The ask quote shows what a current participant is willing to sell the shares for.
A quote is also referred to as an asset's "quoted price."
Key Takeaways
- A quote is the last price at which an asset traded; it is the most recent price that a buyer and seller agreed upon and at which some amount of the asset was transacted.
- The bid quote is the most current price and quantity at which a share can be bought.
- The ask quote shows what a current participant is willing to sell the shares for.
- Investors typically reference the historical quotes for an asset in order to examine potential trends in a security’s market activity and volatility.
- Quotes may be provided by a variety of outlets; investment news sites and trading platforms both provide quotes.
Understanding Quotes
Quotes for assets change throughout the trading day as new transactions occur one after another in a continual stream of trades.
When a stock quote is referenced for a given company, it represents the most recent price at which a trade was successfully executed for that particular security. However, in general, potential investors or sellers in a company will be more concerned about the bid quotes and ask quotes (as compared to the stock quote) because they reflect the prices at which the stock can be bought or sold; the stock quote simply reveals the price at which the stock traded most recently.
Investors typically reference the historical quotes for an asset in order to examine potential trends in a security’s market activity and volatility. Quotes can be represented in relation to an instance of time, allowing for comparisons across comparable time periods. For instance, investors might reference quotes from the same day, but one year apart, in order to chart the potential trajectory for the security. They could also compare quotes across a day of trading, especially if there is volatility, in order to develop an investing strategy in response to the activity.
Quotes may be provided by a variety of outlets; investment news sites and trading platforms both provide quotes. There may be a delay in the reporting of such quotes, especially from free services that are publiclyavailable. Trading and investing platforms may offer quotes as close to real-time as possible as part of a service to their paid subscribers. This service may be especially crucial for subscribers who want to be able to make decisions on their trading activity as soon as quotes become available.
Investing platforms often allow users to set up quote-driven alerts that are sent when shares cross certain thresholds. These notifications can also be tied to trigger an automated response. For example, an investor might put a sell order in place that is contingent on receiving a quote that shares of a security have reached a desired threshold.
