Definition
The term last price is used to describe the most recently reported trading price for an equity or a futures contract. While there may be many last prices during a trading day, a stock's closing price is always a last price too.
Explanation
When an individual wants to invest in an equity or futures contract, there are several prices they may be quoted. This includes the security's bid and ask price, which is oftentimes quoted in pairs as the bid / ask prices. The difference between these two values is referred to as the bid / ask spread. These two values represent the current price at which an investor is willing to sell a security (ask) and the current price at which an investor is willing to buy a security (bid).
As new trades are completed, a third value is introduced: the last price. As the name implies, this represents the last price at which a trade occurred. The last price is typically shown on charts, and updated as new trades occur.
Related Terms
- The term physical delivery refers to an options or futures contract that requires delivery of the asset, rather than being cash settled. Physical delivery can be avoided if the trader closes out their position or rolls the contract forward.
Moneyzine EditorSeptember 20th, 2023 - The term overwriting refers to an options strategy involving the writing of a call option against a long position in an equity. Overwriting an option allows an investor to generate additional income from stocks they own and reduce the impact of price volatility.Moneyzine EditorSeptember 20th, 2023
- The term Options Clearing Corporation refers to an organization that provides both derivative clearing and settlement services. Founded in 1973, the Options Clearing Corporation has grown to be the largest equity derivatives clearing organization in the world.Moneyzine EditorSeptember 20th, 2023
- The term open interest refers to the total number of outstanding contracts for a given series that are to be delivered on a given day. Open interest is typically associated with futures and / or options contracts.Moneyzine EditorSeptember 20th, 2023
