Power-Up With Real-Time Market Data, Starting With the Last Sale

Information to empower your trading is at your fingertips. Learn these essential terms and head to any stock page on Nasdaq.com to transform your knowledge into action.

Power-Up With Real-Time Market Data, Starting With the Last Sale

This information can be found in the quote bar located at the top of each equity stock page on Nasdaq.com. The data displayed in the quote bar updates every 3 seconds; allowing you to monitor prices in real-time.

For investors, the most basic information is the last sale: The most recent trade performed in a security. For highly traded securities, the last sale could change many times in a second. Less-traded securities, in contrast, may take longer to change since transactions occur less frequently.

Information like the last sale is vital to receive promptly when trading. That’s why real-time market data, which is information updated to reflect market activity as its experienced, is important for order fulfillment and price optimization. In contrast, delayed data is published after a time lag and may not accurately represent the current market. 

What is the Ask?

It's common for investors to look at the last sale to determine their trading strategy. However, placing an order and having an unsuccessful execution is possible. This may seem strange – if a security’s price is $2.45, why can't a buyer pay that amount to buy those shares?

That's because the last sale reflects what a previous seller wanted to sell for, but not necessarily the price the remaining sellers are interested in. That's why it's essential to know the ask, which is the lowest price a seller will accept to sell a stock. Also referred to as the offer, this figure helps you trade at the best possible price. 

Let's say you're interested in buying a pair of shoes from an online marketplace; you notice that someone recently sold them for $40. If you didn’t know the shoes’ value, this would give you a good idea of how much they usually sell for. However, no one else may be willing to sell them for as low as $40, or there may be an individual who is ready to sell them for even less. If you found that $42 was the lowest price amongst all potential sellers, this would be the ask, as it’s the lowest price for the pair of shoes right now. Knowing the ask, rather than just the most recent sale price, can help you purchase the shoes at an optimal price within the pricing interests of current sellers. 

What is the Bid?

The bid is the highest amount a buyer is currently willing to pay for a security; it will always be lower than the ask.

If you’re a seller, it’s important to know the bid and its size, as it’s the price and quantity at which someone can liquidate their shares right now.

The Importance of the Bid-Ask Spread

The spread is the difference between a stock’s bid and ask price. 

For example, if a stock’s bid is $2.45 and its ask is $2.48, then the spread is $0.03. By dividing the spread by the sale price, this can also be presented as a percentage, in this case, 1.2%. When comparing stocks of different sizes, using the bid/ask percentage rather than the $ amount is essential for a fair evaluation.

Often, a smaller spread suggests higher liquidity, meaning more buyers and sellers in the market are willing to negotiate. In contrast, a larger spread suggests lower liquidity, as there are fewer investors willing to negotiate. You can use the bid-ask spread to determine whether to place a market order or limit order when trading, helping you to optimize your price and have a successful order execution.

What is Size?

When investing, you must determine the number of shares you are willing to sell or buy. This is called the order size.

The size of other investors’ bid and ask orders can impact your own investment decisions. An order imbalance, which is a disparity in the number of shares on the bid or the ask, can indicate that there is more interest by one of the two parties.

What is Trading Volume?

Trading volume refers to the number of shares that have been traded over a period.

Consolidated volume is the number of shares traded for a single stock over a certain day across all trading venues. Apple Inc. (AAPL), for example, had a consolidated volume of 70,170,540 shares on August 10th, 2022. This means that a little over 70 million shares were traded all together on this one day.

Exchange volume is the total number of shares traded on a stock exchange for a security over a particular day.