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According to Yahoo Finance, a single stock in Alphabet Inc. is worth 898.7 USD as of this writing.

Question: What does the price of $898.7 reflect? I can imagine the price is one of the following options:

  1. Highest bidding price
  2. Lowest asking price
  3. Price for the latest transaction
Bob Baerker
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Vingtoft
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3 Answers3

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The quote price is simply the last price at which a trade completed.

Rocky
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Price for the latest transaction. If the stock is selling for $898.7 means that the stock is currently trading for $898.7, and it will be your ask price of stock if you purchase currently.

Rohan Byanjankar
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Stock price is set to the price with the highest transaction volume at any given time. 

price x no of stocks traded

The stock price you cited was only valid in the last transaction on a specific stock exchange. As such it is more of an "historic" value. Next trade will be done with the next biggest volume. Depending on the incoming bids and asks this could be higher or lower, but you can assume it will not be too far off if there is no crash underway.

Simple example stock exchange:

Buyer A wants 20 for max   $400
Buyer B wants 10 for max   $900
Buyer C wants  2 for max $1,000

Seller A offers  5 for min $700
Seller B offers  5 for min $900
Seller C offers 30 for min $950

Price will be $900 at which 10 stocks can be traded = trade volume $9,000
If it was $899 only 5 could be traded = $4,495
If it was $901 only 2 could be traded = $1,802
Daniel
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