When you go shopping, you should pay attention to the product prices as well as the MRP (maximum retail price). Stocks have the same problem; instead of MRP, they are given LTP, which stands for Last Trade Price.
The LTP, or Last Traded Price, of a stock is the most recent price at which it was sold or bought by a trader.
It is the most commonly used term to describe the most recent value of stocks sold or bought by any trader. Formerly, the price of stocks fluctuated every second, therefore LTP was established as a solution to eliminate the stock’s difficult comprehension.
How is LTP calculated?
The manufacturer or corporation that delivers the goods determines the MRP, whereas both the buyer and the seller choose the LTP.
Assume a seller wanted to sell a stock and issued a tender at the market price; purchasers accepted the price and purchased the stock. The LTP of the stock is regarded the price of the deal.
Importance Of LTP
In a diverse country like India, the stock market is complex, and the price value of stock keeps changing every second. Which makes it difficult to get a sense of stock movement.
LTP is used as part of the solution to track and sense stock movements. In the stock market, LTP establishes a base price for the stock and prevents buyer or trader uncertainty. That will, however, eliminate the possibility of deception.
Also Read: Hedge Funds in India: The Ultimate Guide
Advantages of LTP
LTP has a number of advantages, which are listed below:
- It is simple to track or sense the movement of a stock; any trader, whether novice or experienced, may readily track the stock’s historical performance.
- As it provides a genuine fixed value that avoids fraud and erroneous investments, it eliminates the possibility of loss and false investments.
- Providing traders and investors with a well-defined interface will improve trading quality.
- The most successful stock will attract an increasing number of traders. As a result of this transparency, more traders will be drawn to the stock market.
Disadvantages of LTP
Together with its benefits, it has certain drawbacks, which are as follows:
- Due to their previous losses, some seasoned and skilled traders may find it erroneous.
- The stock’s debut trade will be LTP for the entire day.
- For a stock with LTP, the market will remain unchanged throughout the day.
Frequently Asked Questions
What is LTP?
The most recent price of a stock is referred to as the LTP.
What is the full form of LTP?
Last trading price is abbreviated as LTP.
Why was LTP introduced?
LTP was implemented in the Indian stock market to create a stable and clear stock market interface.