Quoted Price: What is it & How it Works?

When you buy or sell an asset—whether a share, bond, or commodity—the price you see on the trading screen is the quoted price. It is essentially the market’s way of showing the latest value at which an asset can be traded. For investors, traders, and analysts, understanding quoted prices is crucial, as it helps assess the worth of a security at any given moment and aids in making informed financial decisions.

What Is Quoted Price in the Market?

A quoted price is the most recent price at which a security, asset, or commodity has been bought or sold in the market. In stock exchanges, this appears as the bid (buying) and ask (selling) price. These figures reflect current supply and demand and can fluctuate within seconds during active trading hours.

In simple terms, the quoted price represents the going rate of an investment. For example, if a company’s share is quoted at ₹1,200, it means the last trade in that stock happened at this price.

Quoted Price in Securities and Investments

When it comes to quoted securities, the term refers to financial instruments listed and actively traded on a recognized exchange. Shares of listed companies, exchange-traded funds (ETFs), and government bonds fall into this category.

The advantage of investing in quoted securities is transparency. Since prices are readily available in public markets, investors can track their investments in real time. This is in contrast to unquoted or privately held securities, where price discovery is more difficult.

For investors, quoted investments offer liquidity—meaning they can be bought or sold relatively quickly at prevailing market rates.

How Quoted Price Works in Practice?

The working of quoted prices depends largely on market dynamics:

• Bid Price: The maximum price a buyer is willing to pay.

• Ask Price: The minimum price a seller is willing to accept.

• Last Traded Price: The price at which the most recent transaction occurred.

For instance, if a stock has a bid of ₹500 and an ask of ₹505, the quoted price may show ₹505 until a buyer agrees to transact at that level. The difference between bid and ask, known as the spread, reflects market liquidity.

Thus, the quoted amount shown to investors is not just a random figure but a reflection of real-time negotiations between buyers and sellers.

Quoted Amount in Trading and Investment

The quoted amount can vary depending on the type of investment. For shares, it is expressed as the per-unit price of each stock. In the bond market, the quoted price might be expressed as a percentage of the bond’s face value. For mutual funds or ETFs, it could appear as the net asset value (NAV) per unit.

For example, if a bond is quoted at 98, it means the security is available at 98% of its face value. Similarly, in futures trading, a commodity quote will show the per-unit value of that commodity for a given delivery date.

Quoted Price in Commodity Markets

A commodity quote works in a similar way to securities. Commodities like gold, crude oil, and agricultural products are traded on exchanges such as the Multi Commodity Exchange (MCX) in India. Their quoted prices change constantly as global supply and demand conditions shift.

For instance, if crude oil is quoted at $85 per barrel, it indicates the last agreed price at which traders bought or sold contracts. Commodity quotes are especially volatile since they are influenced by international events, weather conditions, and geopolitical factors.

Factors Influencing Quoted Prices

Several elements affect how quoted prices move in markets:

1. Supply and Demand – Higher demand pushes prices up, while oversupply often leads to lower quoted values.

2. Market Liquidity – Actively traded securities usually have smaller bid-ask spreads, resulting in more stable quoted prices.

3. Company Performance – For shares, quarterly earnings and business outlook can directly influence stock quotes.

4. Economic Indicators – Inflation rates, interest rates, and GDP growth all play a role.

5. Global Events – Geopolitical tensions, policy changes, or commodity shortages can cause sudden fluctuations.

Understanding these factors helps investors interpret whether the quoted price of a security represents fair value or if it is mispriced due to temporary conditions.

Advantages of Quoted Investments and Securities

Investing in securities with quoted prices provides several benefits:

• Transparency: Prices are publicly available, leaving little room for ambiguity.

• Liquidity: Investors can enter and exit positions quickly.

• Fair Valuation: Since prices reflect real-time demand and supply, quoted securities usually trade at market-determined values.

• Market Confidence: Being listed on an exchange enhances the credibility of the investment.

For retail investors, quoted investments provide a straightforward way to track portfolio performance without relying on complex valuation models.

Quoted vs Unquoted Securities – Key Difference

While quoted securities are traded on recognized exchanges with visible market prices, unquoted securities are not listed. Examples include private equity shares, venture capital investments, or certain corporate bonds.

The main differences include:

• Transparency: Quoted securities have visible prices; unquoted ones do not.

• Liquidity: Selling quoted securities is easier, while offloading unquoted assets may take months.

• Valuation: Quoted investments reflect market value, while unquoted investments require professional valuation.

For investors, both have merits—quoted securities offer liquidity, while unquoted ones may provide higher returns but with greater risk.

Conclusion

The quoted price plays a central role in how markets function. It acts as a reference point for investors, traders, and analysts, showing the real-time value of a security or commodity. Whether it is a share, bond, or commodity, quoted investments provide transparency, liquidity, and fair value assessment.

By understanding how quoted amounts are derived and the factors influencing them, investors can make more informed decisions and differentiate between quoted and unquoted opportunities.