The last price on a quote is a completed trade between two other parties, and the SEC's order types bulletin, issued 12 July 2017 and updated 18 August 2026, states plainly that the last-traded price is not necessarily the price at which a market order will be executed. The two numbers that describe what is available right now are the bid and the ask. The condition that decides which of them applies is order size: a 1,000-share order against 500 shares of displayed liquidity finishes at a second price.
Bid, ask and spread are the live numbers
Investor.gov's bid price and ask price entry defines the bid as the highest price a buyer will pay for a specified number of shares at a given time and the ask as the lowest price at which a seller will sell, with the difference between them called the spread. The bid is almost always below the ask.
A quote line carries eight fields worth separating, shown here with illustrative values because no live quote is fixed on a page.
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| Field | Example value | What it records |
|---|---|---|
| Last | $50.00 | The price of the most recent completed trade |
| Last size | 200 shares | The share count in that trade |
| Last time | 10:32:04 a.m. | When that trade was reported |
| Bid | $49.98 | The highest price a buyer will pay now |
| Bid size | 500 shares | The displayed quantity at that bid |
| Ask | $50.02 | The lowest price a seller will accept now |
| Ask size | 300 shares | The displayed quantity at that ask |
| Spread | $0.04 | The ask less the bid |
Buying at the $50.02 ask and selling immediately at the $49.98 bid gives up $0.04 a share, or $40 on 1,000 shares, before any commission.
Example: a 1,000-share market order that fills at two prices
The order types bulletin gives the shape of this one: a market order to buy 1,000 shares of a stock at $3.00 per share could have 500 shares execute at $3.00 and the other 500 execute at a higher price, because parts of a large market order execute at different prices when liquidity at one price runs out. The bulletin does not name that higher price, so $3.02 is supplied here to finish the arithmetic.
- 500 shares at $3.00 costs $1,500.
- 500 shares at $3.02 costs $1,510.
- Total cost is $3,010 for 1,000 shares, an average of $3.01.
At the displayed $3.00 the same 1,000 shares would have cost $3,000. The $10 difference is not a fee, a commission or an error; it is the price of the shares that were actually for sale. The same gap on a larger order scales with the share count.
A limit order fixes the price and gives up the fill
A limit order is an order to buy or sell at a specific price or better: a buy limit executes at the limit price or lower, a sell limit at the limit price or higher. The same bulletin states that a limit order is not guaranteed to execute and can only be filled if the stock's market price reaches the limit price. A buy limit at $3.00 against a $3.02 ask sits unfilled, and the trade-off between the two order types is worked through in market or limit: understand the trade-off.
Timing instructions decide how long an order lives
Timing instructions sit on top of the price. A day order cancels at the end of regular trading hours; a good-til-canceled order runs until it is executed in full or canceled, on a time limit each firm sets; an immediate-or-cancel order kills whatever cannot fill at once; a fill-or-kill order cancels entirely unless the whole quantity executes immediately. Those conditions decide how much of an order survives contact with the book, as partial fills works through.
What the firm has to disclose about the execution
The SEC's trade execution page sets out the disclosure behind a fill. Under SEC rules, market centers file monthly electronic disclosures of execution quality on a stock-by-stock basis, and brokers disclose quarterly the identity of the market centers to which they route a significant percentage of orders. Regional exchanges and market makers pay brokers for routing, at perhaps a penny or more per share, which the page calls payment for order flow.
That page also prices improvement from the other side: a 500-share sale filled at $20.05 instead of a $20.00 quote returns $10,025 rather than $10,000, $25 more. Price improvement and slippage are the same mechanism measured in opposite directions. When a quote belongs to a fund rather than a single company, the extra layer between price and portfolio is set out in an index is a measurement; an ETF is a product.
Source references
Primary sources used for this guide. Follow the links for the original scope, definitions and conditions.
- Understanding Order Types – Investor Bulletin | Investor.govAccessed 2026-09-17
- Bid Price/Ask Price | Investor.govAccessed 2026-09-17
- Trade Execution: What Every Investor Should Know | SEC.govAccessed 2026-09-17