Why Last Trade Prices Can Diverge from Displayed Bid and Ask
Summary
The document considers why a stock’s displayed last price can remain far from its current best bid and ask. It offers two data-related explanations: the quote feed may be delayed or inaccurate, or the last trade may be stale because it occurred before fast-moving quotes changed. In either case, the displayed fields may refer to different moments or sources, creating an apparent inconsistency.
An example compares simultaneous market snapshots from two services: one shows matching last prices but materially different quotes, with one service’s quotes resembling an earlier market state. A response also notes that in a rapidly moving market, even a trade from seconds earlier may no longer represent current conditions. The discussion advises treating current bid and ask as more relevant for immediate execution than an old last trade. It is a brief anecdotal explanation and does not establish which feed is reliable in every case.
Key ideas
- A last trade records a past transaction and may become stale as quotes move.
- Different data providers can show inconsistent prices when quote feeds are delayed or faulty.
- Compare timestamps and sources before interpreting a gap between last price and best quotes.
- Current bid and ask are more directly relevant than stale last-trade data for execution decisions.
Tags
Full text
# How can the market price of a stock be significantly lower than its Bid and Ask? # How can the market price of a stock be significantly lower than its Bid and Ask? I was trading various stocks on the market, and I often see that stocks have their price, much higher or lower, than the Bid and Ask. Also, as the Bid and Ask move in real time, the price moves too, but it stays far above/below the Bid and Ask Here is an example with ARRY: My question is, How can this be possible? If the stock's official price, is the price of the last trade, how can it stay below the Best Bid, or above the Best Ask? ## Answer by Kiwiakos (score 8, accepted) https://quant.stackexchange.com/a/30319 I don't see this issue in Bloomberg, therefore I would assume it is just bad data in your source. Based on my snaps I suspect that your bid-ask is 15 min delayed. This stock is very active today, therefore I would be surprised if this is due to stale marks. Edit: in reply to your comment Below are simultaneous snaps from Bloomberg and Yahoo Finance at 20:14 UK time. They agree on the price of 6.20, but while Bbg give bid-ask 6.20-6.21 Yahoo gives 6.13-6.14. On my Bbg screen the price was 6.13 about 15 mins ago (at 20:00 UK time, see chart). ## Answer by jessica (score 4) https://quant.stackexchange.com/a/30318 notice the size of the moves on your two stocks. The bid-offer is moving very fast but the last trade might of occured seconds ago. so its a stale price. you should only look at the bid-offer, thats what matter. last trade kind of meaningless.
Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.