What is CMP in Stock Market?
Trading is easy for traders and investors if they know the abbreviations of the important terms which are often used by professionals. One such term is the CMP, known as the Current Market Price. In this blog, we will discuss about CMP in stock market.
Meaning of CMP in Stock Market
The price of a share changes every second. CMP full form in stock market – Current Market Price. It is the market price at which a stock is bought or sold at the present rate.
When a trade is executed, the price at which the stock was sold impacts the new CMP of that stock based on the actual trading price, the volume traded, liquidity, and the number of buyers and sellers for that stock.
The Current Market Price can also be referred to as the Current Bid Price or Ask Price of security, depending on the kind of buying and selling taking place.
Importance of CMP in Stock Market
The Current Market Price is important for a trader or an investor as it tells the price of a stock at any particular moment. A trader can use the help of CMP to guess the stock’s CMP in the future, doing fundamental and technical analysis. The consumer and economic surpluses are calculated with the use of market prices.
We published a blog on how can choose best stocks for intraday trading, you can read it by click here.
How to Find CMP in Stock Market
The Current Market Price of any stock can be seen on many websites like NSE, BSE, Moneycontrol, Business Standard, Economic Times, etc. The traders can also see the CMP on our trading platform Shree Varahi and make trades easily through it.
To know about the CMP of stock, the trader should know which stock he wants to trade, which will make it easy for him to search the current market price and also the last traded price of that stock.
What is LTP?
The last price at which the trade occurs is known as a Last Traded Price (LTP) of a stock. It serves as a base price and depends on the market sentiment and changes with the change in demand and supply of stocks. We have described the last traded price in one of our previous blogs.
Difference between CMP and LTP
The terms Current Market Price (CMP) and the Last Traded Price (LTP) are very similar and can be the same on some rare occasions. Although similar, the CMP and LTP are very different terms in the stock market. The current market price is the prevailing price in the present market, while the last traded price is the price at which a trader last bought or sold the particular stock.
For a very small moment, the CMP and LTP are the same in the market, but then the price of the stock changes, and there is a new CMP of that stock.
How to use CMP in trading
The current market price can be used in the stock market in three different ways. These are market order, limit order, and stop loss order.
If you want to know different types of order in the stock market, then you can read this blog.
Market Orders are the orders where the trader purchase or sell a stock at the current price which is prevailing in the market. This type of trade is executed immediately and has fewer chances of getting cancelled.
A trader can place two types of market orders the Buy market order and the sell market order the difference between the two is that a share is being bought or sold.
A Limit Order is where the trader places an order to buy or sell a stock at a specific price. This order only gets executed when another trader offers the same quantity of shares at the former trader’s desired price.
A limit order is only active for a particular day, and the broker cancels all the pending orders at the end of the trading day. If the trader’s limit order is cancelled, he can change the limit price or place the order again on the trading day.
Stop Loss Order
A stop-loss order is placed by traders to limit their losses in the case of a sudden downturn in the price of a stock. This order is placed with the broker after the trader has bought or sold the share. When the trader sets a stop loss, it helps him prevent a big loss in case the market falls.
A sell-stop order is placed at a price below CMP, while a buy-stop order is placed at a price above CMP.
The CMP in the stock market is the price at which a trade can be executed. It helps traders understand how the stock is trading in the market. CMP in stock market changes every minute of the trading day. It can be seen on trading platforms and websites that cover the stock market.
The market price should not be confused with the last traded price of the stock. It is not necessary that the CMP and the LTP of a stock will be the same. Before you start trading, it is important to know about all the important terms that are used in the stock market, which can help you in becoming a better trader and investor.
What makes the CMP move?
The price of a stock can change for many reasons, whether it be some decision made internally in the company or any external factors.
Where can a trader check the CMP of a stock?
To check the CMP of any stock, the trader can use the NSE and BSE websites along with our trading platform Shree Varahi.
Is the LTP of share different from the CMP?
Yes, the CMP and LTP of a share are different as the LTP is the price at which the stock was last traded, while the CMP is the price at which the stock is now available to trade.