Quoted Value

In the world of trading, you may come across various terms and phrases that may seem complex at first glance. One such term is the "Quoted Value". As integral as it is to the trading sphere, understanding it can be a bit challenging. But don't fret, this glossary entry is here to make it crystal clear.

Quoted Value: The Basic Definition

The Quoted Value refers to the listed price of a tradable asset at a particular point in time. In simpler terms, it is the most recent price someone is willing to pay for an asset—be it a stock, bond, commodity, or any other traded item. The quoted value should not be confused with the actual selling price, as these figures can often differ. The quoted value simply presents the last advertised price a buyer is prepared to offer for an asset.

How Does 'Quoted Value' Work in the Market?

As the trading day unfolds, the Quoted Value of an asset changes. Market dynamics such as supply and demand have a big part to play in this ebb and flow. When more people wish to purchase a particular asset than sell it, its quoted value tends to rise. Conversely, when there are more sellers than interested buyers, the quoted value may dip.

Understanding Bid-Price and Ask-Price

In understanding the Quoted Value, two important related terms need to be grasped: bid-price and ask-price. The bid-price is the highest price buyers are willing to pay for an asset, while the ask-price is the lowest price sellers are ready to accept. The quoted value you usually see is the last price at which a trade happened, lying somewhere between these two amounts.

Why Is 'Quoted Value' Important?

Quoted Value is the anchor in determining the price of a trade. It provides traders an estimate of an asset's worth, helping them make informed decisions whether to buy, sell or hold. Though it's not a guarantee of the price one will get in a trade, it helps gauge the market mood and forms the basis for trading strategies.

Final Takeaway on 'Quoted Value'

With the complex game that trading can be, understanding terms like Quoted Value simplifies the process, enhancing both your trading skills and your portfolio. Equipped with knowledge, one can be more confident navigating the thrilling waves of the trading world.