LTP in relation to the stock market means last traded price. Investors want to buy a stock at a price near the LTP, as the LTP best shows the current trading value of the stock. You can follow the trend of a stock, along with its LTP, to get the most for your money as an investor.
Ask and Bid Prices
The ask and bid prices are the rates at which a stock is being sold or bought at any given time. The "ask" price is what people selling the stock are seeking, and the "bid" price is what people selling the stock are willing to pay. These both revolve around the LTP, as a seller seeing the LTP go up will try to raise his ask price even more, and a buyer will try to stay as close as he can to the LTP.
All broker services offer an option for a market order when you place an order. This means that the transaction will take place as close to the LTP as the broker can get at that moment, even if it's higher than you would like. Therefore, almost all brokers and analysts recommend not using the market order when you invest. The single advantage to the market order is that you won't have to keep adjusting your stop or your limit.
Stops and Limits
Use stops and limits to best control your money. A stop is the minimum amount for which you are willing to sell your stock, and a limit is the maximum amount of money you are willing to spend on a stock. The one drawback of these is that if a stock is very dynamic, you may have to change the stop or limit in your order a few times before the order goes through.
Utilizing LTP During a Trade
Keep an eye on the LTP when buying a stock. The LTP will clue you in as to what price you should be set for your stop or your limit. This will help you get the most for your money if you are buying and profit the most if you are selling.
Following the Trend
The trend of the stock is the direction in which it is going. Set your limit a little bit higher than the LTP if the stock's trend is rising, and set your limit lower than the LTP if the stock's trend is falling in order to save yourself money.
- Photo Credit stock market analysis screenshot image by .shock from Fotolia.com
What Is LTV HELOC?
LTV HELOC is an acronym, standing for Loan to Value Home Equity Line of Credit.
What Is the Meaning of Stock Exchange?
Investors enter the stock market for improved standards of living. Stock exchanges are critical to this investment process, as they facilitate trades...
What Does Yield Mean in Stocks?
Stocks with a high dividend yield are given preference by traders and investors alike. Since stock yields tend to change over time,...
How to Price an ATV on Kelley Blue Book
For over half a century, the Kelley Blue Book has been the go-to pricing guide for trucks and automobiles. As the market...
How to Calculate a Bond Price
This article describes the formula for how to price a fixed-rate bond utilizing an Excel spreadsheet.
- How to Redirect LPT1 to a USB Printer
- What Does 585 Mean on Gold?