The number in a stock app may show the last completed trade. Your next trade happens against the prices available when your order reaches the market.
Bid, ask, spread: three terms to know
The bid is the highest price a buyer is currently offering for a specified quantity. The ask is the lowest price a seller is offering. The gap between them is the spread. Investor.gov defines bid and ask prices.
This is an invented quote, not a live stock. A displayed last-trade price of $20.00 would not promise that a new purchase can be completed at $20.00.
What changes with a market order?
A market order seeks to execute at the best available price. It does not lock in the last-trade number on your screen. Available prices can change while the order is traveling, and larger orders can fill at more than one price.
What changes with a limit order?
A buy limit order sets the maximum price you are willing to pay. A sell limit order sets the minimum you will accept. A limit order may remain unfilled if the market does not offer a matching opportunity. Price control and getting a fill are different concerns. Investor.gov compares order types.
A simple way to read a quote
- Check whether you are looking at the last trade, the bid or the ask.
- Look at the spread and the quoted quantity.
- Check whether the quote is current or delayed.
- Know the order type and any price limit you entered.
Quotes are snapshots. They do not guarantee that the same price and quantity will still be available when an order executes. Brokerage fees, where applicable, are another part of the total cost.
The dog’s takeaway
Understanding the screen is more useful than being surprised by it. Before judging a fill against a number you saw earlier, make sure the two numbers describe the same thing.