The LTP in Share Market
In a stock market, shares are not displaced with a proper price label like in superstores etc. Their price always fluctuates. Sometimes it goes higher or sometimes it falls below. The price that you see for a company’s stock is Last traded price or LTP in the share market.
LTP in share market always goes through fluctuation Sometimes these fluctuations are very extreme. You have to spend more than you expected. The latest stock value is provided when the stock exchange is open, and the best gauge of value is provided when it’s closed.
Traders should know about the LTP. It is actually a digit code which shows all your trade history even if it is only for fraction of second. When you buy stock, you have to pay the last traded price but not every time. It always depends on the ask prices and bid prices.
The ask and bid are the rates at which the stocks are being brought or sold. Ask prices refer to the seller and bid prices refer to the buyer. LTP is convenient as it provides you information about what you could purchase and moves an offer for. It has a tracking facility which tells you whether a stock is higher or lower.
The number of shares which are bought and sold is determined by stock trading volume. This plays a key role as you can determine the closeness of the current trading price to the LTP. The less volume results in more volatility in the stock. Which indicates that is less inclined in price.
Likewise, if the volume is greater the spread would be smaller between ask and bid prices. It would be advantageous for the seller as he is more credible to get the price near to original to ask price. And in the same way, the buyer pays the price close to the original bid.
What is LTP in share market? LTP and closing price has a relation in the stock market. LTP of the day is the closing price of the specific exchange business. It is the price of the whole day at which the exchange handles the particular price of the stock.
Different exchanges may have different closing time e.g. Some of the major U.S exchanges closes at 4 p.m. It can also happen that the stock trading continues after hours. Some traders remain active after hours which means lower volume and there will be lesser chances to pay LTP.
Calculation of LTP in share market:
There comes a question in the mind of those who are new to the stock market that how can we determine the price of a stock? Who sets the prices? Various factors play role in determining the price of a stock. The owner sets the price of the stock and on the other hand, the buyer sets a bid that they are willing to buy the share. The stock exchange compares the buyers and sellers’ prices.
The buyer purchases the share and the seller receives a bid price. The difference between these two prices is calculated by the stock exchange. ‘’Ticker’’ is the asking price of the share. This keeps on changing whenever a successful sale of a share has been done.
CMP in share market
CMP in share market is an important term used in the stock market which stands for Current Marketing Price. It is the rough estimated value of the shares which are trading at a specific time. Due to the dynamicity of the stock market, you will rarely find an opportunity to buy as many shares as you wanted at Current Marketing Price.
CMP in share market is actually ‘average best price’ where the greater number of buyers and sellers agreed upon to buy or sell shares at a particular time. You can compare these prices with those on the T.V screens and apps. You will notice no difference between them. Both are the same prices.
How to find the current market price?
The quoted price that sees for a stock on various websites regarding business, news etc. is the current market price. Want to know the current price of a stock? You want to estimate whether you can pay to for a share or not? Then it’s very easy. Just follow a few steps and you will able to get the answers to all your questions.
Visit any financial information site of your choice and search for its ticker. If you decide of buying or selling the share, you will enter in “Market Order” with your brokerage. Make it clear to yourself that there will be a slight difference between the market price when you enter the order and when the trade comes to an end.
If your order is small, there might be any change in the prices. But if your order is large, there may be a huge change. The fluctuations in the prices may go to the extreme. You have to spend more or less money then you expected when buying and there may be a situation where you receive more or less than you expected when selling.
I have seen people who are anxious about their trading prices. There are many factors that can affect the trading price. You can issue a “Limit Order” if worried about the fluctuations in trading price.
In this situation what you are actually doing is that you are individuating the lowest price at which you want to sell or the highest price at which you want to buy. You tell your broker not to accept any price other than that you specified. Let’s take an example, you tell your broker to sell 1000 shares only if you get at least 100 USD to 150 USD or to buy 1000 share in the range of 100-120 USD.
Limit orders let you know what is going to happen if your trade is not fully executed like a short-term or long-term effect of a broker on your shares etc.
Keep in view that if your order is taking too long, there might be changes in the broker i.e. it may tell you to pay multiple commissions at a time which simply means that your net earnings would be affected.