Have you ever bought a stock and were surprised by the price you paid? Maybe you paid less than you expected or perhaps you paid more. It can be hard to keep up and understand how this situation occurs. This may happen in fast or volatile markets when prices change rapidly. So while it might seem logical that th🌳e last price of a stoc🐟k is the price where it will trade next, this rarely occurs. Here's why.

Factors That Affect Stock Prices

Before we take a look at how stock prices work, it's a good idea to understand the factors that affect movements in share prices.

• Supply and Demand: This is perhaps one of the largest influences on stock prices. When demand increases and supplies are limited, prices move in the same direction. On the other hand, when supplies rise and demand wanes, prices tend to drop. Investors typically increase their demand for a stock when a company is favored in the market or rumored to see growth.
• Corporate Activity: Company news, earnings, new product releases, 澳洲幸运5开奖号码历史查询:research and development (R&D), analyst ratings, and personnel changes (to name a few) can have a big impact on how stock prices move. For instance, positive earnings may propel the stock price up for a company while bad news may push another company's share prices down.
• Economy: The economy has a big impact on share prices. For instance, 澳洲幸运5开奖号码历史查询:central banks may have to increase interest rates during times of inflation. This doesn't bode well for 澳洲幸运5开奖号码历史查询:consumer discretionary stocks and their share prices as consumers cut back on buying luxury and discretionary goods.
• Geopolitical Events: Trade deals, regulations, and international relations can influence share prices, too. For instance, 澳洲幸运5开奖号码历史查询:Russia's invasion of Ukraine had a major impact on global energy prices and the share prices of energy companies.
  

How Stock Prices Work

The last price of a stock is just one price to consider when buying or selling shares. That's because the last price is simply the most recent one. For example, shares of Microsoft (MSFT) may open the trading day at $50 per share, jump to $51, go back to $50, and then close the day at $49. Since the last price is the most recent trade or print, the last price is $49 per share.

A stock quote includes more than just 🔯the🐟 last price. It also includes its bid and ask price, where:

• The 澳洲幸运5开奖号码历史查询:bid price is the best available price for sellers, as it reflects the highest price that somebody is willing to pay for the stock.
• The 澳洲幸运5开奖号码历史查询:ask or offer price is the price that sellers are willing to accept from buyers.

🌳 Investors can use the last traded price to gauge where the market is and the activity that other investors have recently done. But once this price is posted, it might not be the actual price you pay if you decide to buy the security.

The better indicator is the quote, which includes both the bid and ask prices. These prices also change, as buyers and sellers adjust their bids and offers from one minute to the next. This means there are no guarantees that an 澳洲幸运5开奖号码历史查询:order will be execu🍎ted at the bid💮 or ask price either.

Effective Order Types

When you place a 澳洲幸运5开奖号码历史查询:market order, you ask for the 澳洲幸运5开奖号码历史查询:market price. This means you buy at the lowest ask price or sell at the highest bid that is available for the stock. These prices are normally given to you when you request a quote. You can ask your broker for these prices or see them online through your online 澳洲幸运5开奖号码历史查询:trading platforms.

But if you want to buy or sell a stock at a specific price, it may be more advisable to use a 澳洲幸运5开奖号码历史查询:limit order to do so. This way, you can be sure that all your buy orders will be filled at a price that is equal to or lower than your specified 澳洲幸运5开奖号码历史查询:price level. Conversely, a sell limit order will ensure your sell order is exe🌄cuted at a price that is equal to or higher than the price l🌄evel that you want.

The Bottom Line

Stocks represent a small fraction of ownership in a company. Companies issue stock to investors to raise money for their growth or to fund their operations. Different factors can affect stock prices, including supply and demand, as well as impoౠrtant company news. But, understanding how these prices work is important for any investor and can help you decide whether to buy or sell stock—and when.