Last Traded Price (LTP) and Closing Price are two terms that you may often come across in the stock market. Though both give insights into a stock’s value, they serve different purposes and are used in different ways by investors and traders.
LTP reflects the price of the most recent trade, while the Closing Price marks the end of the trading day. These metrics play a key role in how stocks are analyzed, helping investors make decisions about buying, selling, or holding.
In this article, we will discuss the differences between LTP and Closing Price and their relevance in market analysis.
What is the Last Traded Price (LTP)?
The Last Traded Price (LTP) is often confused with the closing price, but they represent different aspects of a trade. So, what is LTP in share market?
LTP refers to the price at which a stock was last traded before the market closed for the day. It is determined when a buyer and seller agree on a fixed number of shares to be sold at a specific price on a particular date.
LTP serves as an alternative for those seeking quick gains in the market without continuous trading. It represents the final trade price for the day and typically ends with values like .00, .01, .02, etc.
LTP does not reflect any bonuses or dividends announced during the day, as it only shows the price for the specific trade. It functions similarly to the closing price but only applies to individual stocks.
What is the Closing Price?
The close price of a stock is just the last price it hits at the end of the trading day. It’s the number everyone looks at to know where the stock stands for that day.
Once the market shuts down, the close price stays the same until the next day’s trading starts.
Why does it matter? Well, investors use it to see how a stock has been doing over time. It’s like a snapshot of the stock’s health, showing whether it’s doing good or not.
People also look at the close price to help guess what might happen in the market the next day.
Key Differences Between LTP and Closing Price
By now, you know that Last Traded Price and the Closing Price are the two commonly referenced metrics in the stock market. While both provide insights into a stock’s value, they differ in calculation and purpose.
Below is a comparative table highlighting their key aspects:
| Closing Price | Last Traded Price | |
| Definition | The final price at which a security is traded during regular market hours on a given trading day. | The most recent price at which a security has been traded, is updated continuously throughout the trading session. |
| Purpose | Serves as a benchmark for evaluating a security’s performance over time and is commonly used in technical analysis and charting. | Provides real-time information about the current market value of a security, aiding traders in making immediate decisions. |
| Stability | Remains constant after the market closes until the next trading session, offering a stable reference point for analysis. | Fluctuates throughout the trading day based on market activity, reflecting the dynamic nature of the market. |
| Use in Analysis | Utilized in calculating various financial metrics and indicators, such as moving averages, to assess historical performance and identify trends. | Essential for intraday trading strategies and algorithms that rely on the most recent price data to execute timely trades. |
| Impact on Investors | Provides investors with a clear snapshot of a security’s end-of-day value, which is crucial for portfolio valuation and performance assessment. | Offers insight into the immediate market sentiment and liquidity, influencing short-term trading decisions and strategies. |
| Timing | Determined at the end of the regular trading session, typically not accounting for after-hours trading activities. | Updated in real-time with each executed trade during market hours and may include after-hours trading, depending on the data source. |
| Reference Point | Often used as a standard reference for historical price comparisons, performance measurement, and in the calculation of indices. | Serves as a real-time reference for traders looking to enter or exit positions based on the latest market movements. |
So basically, the Closing Price is stable and helps in long-term analysis. Whereas the last Traded Price keeps changing and helps traders make fast decisions.
Conclusion
The Last Traded Price (LTP) is the most recent price at which a stock was bought or sold. It’s like a snapshot of what’s happening in the market right now. The Closing Price is a little different – it’s the average price of the stock during the last 30 minutes of trading. People often use it to see how a stock did over the whole day. Knowing the difference between these two prices can help you make better choices when trading or investing online.
