Saint Columban College

College of Business Education

Pagadian City

Financial Markets Course

Name: Nova Trixia M. Bangquiao Course & Year: BSA-2

Below are the different prices in the stock market. Stock price is the voice of the stock market.
 And as a voice, it gives you a hint of the status and present condition of any stock. More than a
number telling you the worth of a stock, price is actually a clanging cymbal that can guide you in
your investing decisions.  Define each of them and explain its uses or implications in the stock
market specially the investors.

a. Market Price
Definition: The market price is the current price at which an asset or service can be bought or
sold. The market price of an asset or service is determined by the forces of supply and demand.
The price at which quantity supplied equals quantity demanded is the market price.
Implication: The term market price refers to the amount of money for what an asset can be sold
in a market. The market price of a given good is a point of convergence of the demand and
supply for that good.

b. Opening and Closing Price

Definition: Opening price is the price at which the financial security opens in the market when
trading begins while closing price is the last price at which a security traded during the regular
trading day.
Implication: Opening price is an important marker for that day's trading activity, particularly for
those interested in measuring short-term results such as day traders. The closing price is the raw
price or cash value of the last transacted price in a security before the market officially closes for
normal trading. It is often the reference point used by investors to compare a stock's performance
since the previous day—and closing prices are frequently used to construct line graphs depicting
historical price changes over time.
c. Bid and Ask/Offer Price
Definition: The bid price refers to the highest price a buyer will pay for a security. The ask price
refers to the lowest price a seller will accept for a security.
Implication: A 'Bid' is the price that is chosen by a buyer when they want to purchase shares. On
the other hand, the 'Offer' price, sometimes called the 'Ask' price, is the price at which the seller
is offering to sell their shares.

d. Previous Price
Definition: Previous close is a security's closing price on the preceding time period of the one
being referenced. Previous close almost always refers to the prior day's final price of a security
when the market officially closes for the day. It can apply to a stock, bond, commodity, futures
or option contract, market index, or any other security.
Implication: In financial information the previous closing price of any security is an important
daily measure for reporting purposes. It marks the daily measuring point against which updated
returns can be calculated and for which new information is gathered to inform new investing
decisions and strategies. It can be an important indicator for a variety of different technical
patterns and fundamental measures.

e. High and Low Price

Definition: High Price Strategy is pricing strategy in which the company or manufacturer keeps
the price of the product on the higher side when compared to similar products(or competitor)
products in the market. The lowest price at which a security trades on a given trading day. It is
usually lower than the closing price and is also called the daily low.
Implication: High-low pricing is the practice of setting the price of most products higher than the
market rate, while offering a small number of products at below-market prices. By doing so, a
retail or web store location hopes to attract customers with its low-price offerings, at which point
they will also buy some of the high-price items. The low-price items are not usually set
permanently at a lower price. Instead, coupons and other promotions are used to reduce prices to
low levels for short periods of time.

f. Floor and Ceiling Price

Definition: Ceiling price is the highest limit price where a stock can be traded in a day. A price
floor is the lowest amount at which a good or service may be sold and still function within the
traditional supply and demand model.
Implication: Price ceilings prevent a price from rising above a certain level. When a price ceiling
is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess
demand or shortages will result. Price floors prevent a price from falling below a certain level.
When a price floor is set above the equilibrium price, quantity supplied will exceed quantity
demanded, and excess supply or surpluses will result.

g. Best Price
Definition: the lowest price a buyer can obtain something for or the highest price a seller can sell
something for Farmers will take a commodity like grain wherever they can get the best price.
Implication: the lowest price that a buyer can buy something for