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What is LTP in Share Market.. The price of a stock listed on the share market is never static. It keeps on rising and falling based on the demand and supply among the buyers and sellers. The sellers set the Ask Price of a stock at the rate at which they are willing to sell the shares held with them. At the same time, the buyers offer a Bid Price of a stock at the rate at which they are willing to purchase the shares. The stock exchange matches the rates between the buyers and sellers of stocks to make trades at compatible prices. The price at which the sale of stocks is concluded becomes the LTP i.e. Last Traded Price. This article helps you understand more about LTP in the share market. What is LTP in the Share Market ? Last Traded Price is the most recent price that the stock was bought and/or sold at. It is a number of the past and hence helps to understand how the price of a stock has fluctuated in the past. It is a reliable metric to assess the valve of stock and also helps to determine how the stock prices will fluctuate in the future. It helps to estimate the possible range of a stock based on its past trading history. It aids in establishing trends in the price of a stock. In the share market, it takes only 6 microseconds per trade execution. Since several trades take place every microsecond, the Last Traded Price of stock can get changed several times in a second. The LTP keeps on changing as per the demand and supply of the stocks. This means, that with every successful trade, the LTP will change. After understanding LTP meaning in share market, let us understand how LTP is determined. Example to Understand How is LTP Calculated Let us understand the concept of LTP with the help of an example. Let's say, a seller wants to sell the shares of XYZ Limited at Rs. 200 per share. That means the Ask Price is Rs. 200. There is a buyer who is willing to pay a maximum of Rs. 180 for the same share. That means the Bid Price is Rs. 180. Now, since the Ask Price and Bid Price do not match, the trade cannot take place. Now, let us assume that another seller enters the market who is willing to sell the shares at Rs. 180 per share. That means the second Ask Price is Rs. 180. Now, since the Ask Price matches the Bid Price, the trade will take place at Rs. 180. The price at which this trade happens i.e. Rs. 180 is referred to as the Last Traded Price. Trading Volume Impacts LTP Trading Volume plays a significant role in determining LTP in the share market. Trading volume is basically the quantity of a particular stock that is being traded at any given time. The more a stock gets traded in the market, its trading volume increases. This in turn increases the volatility of a stock. More volume and volatility mean there are an increasing number of buyers and sellers playing in that stock. Thus, with more volatility, the LTP of that stock fluctuates even more rapidly. Hence, LTP is highly manipulated by the trading volume. In Conclusion LTP is one of the important indicators for a share market trader or investor. It serves as a valuable piece of information as it tells you the last price that a buyer was willing to pay for a particular stock. You can use this price information to place your Ask Price or Bid Price. Open online derivatives trading account with Indira securities, leading equity derivatives in India.