Trading & Market Structure

Price Discovery

Definition

What is Price Discovery?

The process through which market orders and information establish a traded price.

Example in practice

New earnings information leads buyers and sellers to agree on a lower price.

Keep learning

The highest price a buyer is currently willing to pay for a security.

The lowest price a seller is currently willing to accept for a security.

The difference between the best available buying and selling prices.

An instruction to buy or sell immediately at the best available prices.

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