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Last Traded Price (LTP): What is Last Traded Price, Impact, Importance

What is Last Traded Price?

The most recent price at which a stock, commodity, or currency, was traded in the market on a trading day is known as the last traded price or LTP. LTP represents the last price at which a transaction occurred for that asset. The fact that each stock is traded at a different price means that the previous sold price differs from one stock to another.

LTP is an important metric for investors and traders because it gives them an idea of the current market value of the asset. It also provides information on the direction of the asset's price movement, as well as the level of market activity.

What impact does LTP have on stock prices?

According to the accepted view of how markets function, they are efficient, which means that they accurately and promptly factor in all available information when determining the price at which stocks trade. But if that were the case, why should there be a connection between the most recent transaction and the typical trade?

If we assume that investors are unable to assess various types of data appropriately or that they are unable to analyze all available information, we might be able to understand this. Then, we could assert that what investors learned through their experience with other stocks and knowledge of the companies involved in this case would be mirrored in what they already knew about other investors' thoughts.

Due to their prior experience with similar circumstances, they wouldn't require anything new from the organization. Individual investors typically must exchange stock in modest increments rather than buying or selling millions of shares of a company's stock at once.

If demand for a stock is high, its LTP rises and this can lead to an increase in its stock price. On the other hand, if there is low demand, the LTP decreases, and this can cause the stock price to fall. LTP is an important indicator of market sentiment and can influence investors' decisions to buy or sell a particular stock.


Importance of Last Traded Price

It holds significance for investors and traders as it provides a snapshot of the present market value and the direction in which the asset's price is moving. The Last Traded Price (LTP) is instrumental in predicting the future approach of a stock and establishing preferred price levels for buying or selling. Calculated in real-time, the LTP undergoes changes with each executed trade. It distinguishes itself from the current market price, representing the cost at which the subsequent trade is available. Furthermore, the LTP differs from the closing price, which denotes the price of the last trade before the market concludes. Leveraging the LTP enables analyzing market trends and assessing a particular stock's supply and demand dynamics.