Investors frequently refer to LTP as the closing price or market price. However, LTP and the closing and market prices are not the same thing in practice. So, let’s explore all about LTP in detail.

LTP Meaning

It is the closing price at which a specific share was exchanged on the stock market. Put otherwise, it represents the most recent price at which a transaction for that specific share was made. This data is significant because it provides an estimate of the share's current worth and the price that purchasers are willing to pay.

How is LTP Calculated?

LTP full form is determined by a number of variables, including supply and demand, market mood, and business performance. Generally speaking, the last traded price for a certain share is determined by averaging the purchasing and selling prices at the time of the last exchange.

To further appreciate this, consider the following scenario: Suppose that a share is purchased for Rs. 100, sold for Rs. 104, and the most recent sale was made for Rs. 102. Since the LTP in this case, is the average of the buying and selling prices, it would be Rs. 102.

What is the Effect of LTP on Stock Prices?

The conventional wisdom on the operation of markets holds that they are efficient, which means that all relevant information is promptly and precisely included in the price at which stocks trade. But why should there be a connection between the average trade and the most recent business if this were the case?

This may make sense if we think that investors lack the ability to assess various types of data correctly or that they are unable to analyze all available information. Subsequently, we could argue that investors' knowledge of what other investors were considering was a reflection of their prior experience with other equities and familiarity with the companies in question.

They would already have it from their prior experience with similar circumstances so that they wouldn't require anything new from the organization. Typically, an individual investor must trade a company's stock in smaller increments rather than buying or selling millions of shares at once.

Market-making, the process by which one person sells his share and another purchases it, is essential to a well-functioning, orderly market.

What is the Importance of LTP in Stock Market?

• LTP in share market assists you in determining the direction of the security's price. The LTP can be used by options and intraday traders to guide their trading decisions.
• The price a buyer was willing to pay to purchase the share is shown by the most recent trading price.
• You can place a market order based on LTP since it allows you to forecast future stock price movements.
• Since it's one of the most crucial criteria to take into account when making short-term trades, short-term stock market traders use the last traded price.

How to Track LTP?

In the share market, LTP can be tracked in a number of ways. Using stock market websites or applications, where you can view real-time updates on the most recent price of a certain share, is one of the most popular approaches. Additionally, these platforms offer charts and historical data to follow the evolution of LTP over time.

Using trading software that brokers or trading platforms offer is another option to monitor LTP. To track LTP and help you make better investment decisions, these tools include advanced capabilities, including technical analysis, real-time market data, and configurable notifications.

Difference Between LTP and Closing Price

The Bottom Line

The Last Traded Price, or LTP in trading, is a crucial idea for stock market investors. It provides information about the most recent price at which a specific share was traded as well as the share's present value and demand. Knowing LTP can assist investors in tracking the performance of their investments and making well-informed decisions.