Current Price
The current price is the most recent selling price of a stock, currency, commodity, or precious metal that is traded on an exchange and is the most reliable indicator of that security's present value. These include: Current value, an accounting method in which assets are priced according to their replacement value rather than their original costs. Current yield, an estimate of the annual income of an investment that is based on dividing the total income by the current price. Cash price is the latest quoted price on an exchange and is thus synonymous with current price. When a security is sold over-the-counter (OTC) rather than on an exchange, the current price is based on the current bid price listed by buyers and the current ask price listed by sellers. The current price is the most recent selling price of a stock, currency, commodity, or precious metal that is traded on an exchange and is the most reliable indicator of that security's present value. Current price is an indicator of current value, but the real price of the next sale may be higher or lower depending on supply and demand. If the item is on sale, the current price will be lower than the retail price for that item.
What Is Current Price?
The current price is the most recent selling price of a stock, currency, commodity, or precious metal that is traded on an exchange and is the most reliable indicator of that security's present value.
Understanding Current Price
Current price is also known as market value. It is the price at which a share of stock or any other security last traded. In an open market, the current price functions as a baseline. It indicates the price a buyer would be willing to pay and a seller would be willing to accept for a subsequent transaction in that security.
In the case of a bond, the current price is often quoted as 10% of par or face value. That is, a bond that is reported as currently trading at $99 is actually priced at $990.
In a listing in an investment portfolio, the current price represents the value at a stated date.
Current price is an indicator but not a guarantee. On an exchange, the current price does not dictate the next sale price. Changes to the supply and demand associated with the security will shift its price continuously.
There are a number of terms that are similar or identical in meaning to current price. These include:
Types of Current Price
Current Price in Over-the-Counter (OTC) Trades
When a security is sold over-the-counter (OTC) rather than on an exchange, the current price is based on the current bid price listed by buyers and the current ask price listed by sellers. Dynamic in nature, the current price in an OTC trade fluctuates based on supply and demand.
Current Price in the Bond Market
A bond’s current price is determined by comparing the current interest rate to the interest rate associated with the bid. The par or face value is then adjusted based on the remaining interest payments due until the bond reaches maturity. The closer a bond is to maturity, the closer the current price will be to the face value listed on the bond.
Current Price in Retail Sales
In a retail store, the current price of any item is the amount being charged for it at that moment. If the item is on sale, the current price will be lower than the retail price for that item.
Related terms:
Ask
The ask is the price a seller is willing to accept for a security in the lexicon of finance. read more
Bond : Understanding What a Bond Is
A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. read more
Cash Price
The cash price is the actual amount of money that is exchanged when commodities are bought and sold in the real world. read more
Commodity
A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. read more
Current Yield
Current yield is the annual income (interest or dividends) divided by the current price of the security. read more
Discount
In finance, a discount refers to a situation when a bond is trading for lower than its par or face value. These include pure discount instruments. read more
Exchange
An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. read more
Face Value
Face value is the nominal value or dollar value of a security stated by the issuer, also known as "par value" or simply "par." read more
Forward Spread
Forward spread is the price difference between the spot price of a security and the forward price of the same security taken at a specified interval. read more