What is quotation in simple words
It is believed that the modern word "quotation" is based on the French verb coter, which literally translated into Russian can be translated as "to measure, measure".
There is also a version of the origin of this term from the English economic term financial quote, the most accurate translation of which sounds like "financial rate".
Popularization of the term "quote", according to experts, was noted in the second half of the XVIII century.
It was then that securities appeared in the European financial markets. Later quotations were applied not only to securities, but to almost all financial assets, including currencies, commodities, raw materials, etc.
Types of Quotations
The current interpretation of a quote is the value of a financial asset at a specific time interval. The value of the quotation is alternately influenced by the buyer and the seller, so it changes constantly.
Exchange analysts distinguish two basic types of quotes: direct and reverse. The direct quotation means the direct price of goods, the original value. For example, a bond of Company N costs $3,000.
The reverse quotation is a peculiar antagonist of the direct quotation. It informs a trader about the quantity of goods which can be bought for one unit in money equivalent.
Specialists distinguish two other types of quotations: securities quotations and commodities quotations.
The first category (securities quotations) in exchange practice includes shares, bonds, units of mutual funds, ETF units etc.
The second category (quoted commodities) includes oil, gas, precious metals, agricultural commodities and other commodity groups traded on exchanges.
In order to understand what a security's quotation is, it is worth remembering that there are two prices in stock quotations at once. The purchase price at which a security can be purchased, which is marked as Ask, and the sale price at which a security can be sold, which is marked as Bid. It is clear that the bid price is insignificantly higher than the ask price.
The peculiarity of bond quotations is that they reflect a percentage of the security's face value, not a fixed value. It looks like this - one column shows the price of the bond, and the other column shows the percentage of the face value at a certain point in time, e.g. 97.2%.
If we talk about quotations of exchange goods, specific terms may be used here, depending on the category of goods. For example, in quotations of oil, the quantity of dispatched goods is specified in barrels.
There is one more typology: specialists distinguish between pre-contract and post-contract quotes. In the pre-contract quotations the base price of the goods at the moment of conclusion of the contract is indicated. And the post-contract quotation fixes the final price of the contract.
What is a quotation at the exchange
The market price of a commodity at the moment is established and published by a special committee, which exists practically at any stock exchange, on the basis of all transactions made by brokers and other representatives of the stock exchange. The commission also carries out control of correctness of deals. The results of the commission's work are used to draw up a quotation list, which is sent to bidders. It reflects prices of financial assets and exchange goods and volumes of deals in these categories.
In addition, the quotation list necessarily specifies the date of formation of the quotation value, the name of the issuer, if the securities are concerned, the quotation value of the securities at the beginning of trading and at the end of the exchange session, the minimum and maximum price values.
Under the mandatory program the quotation commission makes and publishes a special exchange bulletin, its periodicity is determined by each exchange individually. Most often the bulletin is issued daily and is also published in the business media. Moreover, the tasks of the exchange's quotation committee include familiarization of exchange process participants with quotations on the information board, making rating of securities from the listing list, etc.
How to decipher basic quotes
In order to decipher stock exchange quotes, it is necessary to know the basic terminology.
The Symbol stands for the name of the traded asset. The maximum value of the share price from the buyer is Bid. The abbreviation Ask shows the minimum value of the rate price from the seller of the asset.
AskSize - the amount of shares the seller is ready to give at the minimum price;
BidSize - the amount the buyer is ready to buy at the maximum price;
Size - the index of the above two parameters;
Tick - dynamics of quotation fluctuations;
Change - price deviation relative to the last deal;
Chg% - the same indicator, but in percentage;
Volume - total amount of shares, bought and sold in current values, compared with the beginning of trading;
High - maximum value of the share rate;
Low - minimum value of share rate;
Last - price of the last deal;
LastSize - number of shares, bought and sold at the final price.What is a quote on the currency market
A currency quotation is a ratio of rates of different currency pairs. These quotations are usually displayed on the information screens of exchange offices or bank branches. In currency quotations currency is divided into a base currency and a quoted currency. The base currency is taken as the base currency, per unit of which there is a certain amount of quoted currency.
Another typology divides quotations into direct and reverse. Direct quotes are quotes where the quantity of currency is specified relatively to the basic unit that is the same U.S. dollar. For example, USD/, USD/CNY, etc. Correspondingly, inverse quotes show inverse dependence - the number of dollars relative to another currency, for example, CHF/USD.
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