Two-Way Quote

Posted in Finance, Accounting and Economics Terms, Total Reads: 883
Advertisements

Definition: Two-Way Quote

Two way quote is a type of quote which gives both: the ask price and the bid price of a security, suggesting the would-be traders of the securities’ current price at which the traders can buy/sell the securities. The two-way quote also reveals the spread between ask and the bid, giving the traders a hint about the current liquidity of the security (a smaller spread would suggest about more liquidity).

 

Explanation:

This type of quote relatively provides far more information to users than a normal last-trade quote that quotes only the price at which that security last traded.

 

An example of a two-way quote is: Walmart quote of $54.50/$55.30.

This tells traders that they can currently buy Walmart shares for $55.30 else sell them for $54.50. The spread between ask and the bid is $0.80 ($54.30-$52.50).



This two way quote should be used carefully as it tells about the liquidity as well the spread between the bid and the ask price.

 

Hence, this concludes the definition of Two-Way Quote along with its overview.

Advertisements

Browse the definition and meaning of more terms similar to Two-Way Quote. The Management Dictionary covers over 7000 business concepts from 6 categories.

Search & Explore : Management Dictionary



Share this Page on: