# LTP-ASK-BID while placing a amrket order

LTP is 100

ASK is 95

Bid is 96 ,if im placing order at what price it will get executed?im placing a market order.

I think you have got the bid and ask numbers interchangedâ€¦

If it is a market buy order it will be bought @ the ask rate, and when you place a market sell order, it will be sold @ the bid rate. The rate at which you buy (the ask rate) is always lower than the rate at which you sell (the bid rate).

More on this topic here - http://zerodha.com/varsity/chapter/the-trading-terminal/

Refer to section 9.6.

1 Like

LTP is displayed just for your information. It has no other significance. It just tells at what price the recent trade took place in that scrip. So forget about this.

If you are buying, you should look at the Ask Rate. This is rate at which you can buy. (Someone is asking you, do you want to purchase from him at that particular price). Also Ask Rate is accompanied with Ask Quantity
Example (Best 5 ask rates, you can see this in the market depth/snapquote window)
Ask rate 96.0, Qty 2500
Ask rate 96.3, Qty 3000
Ask rate 97.0, Qty 2000
Ask rate 100.0, Qty 5000
Ask rate 105.0, Qty 750

If you place a market order for 13000 quantity, all these 5 prices will get filled and the last price 105 will have pending 250 quanity.

The average price of your market order becomes = (2500x96 + 3000x96.3 + 2000x97 + 5000x100 + 500x105) / 13000
You Average Buy Price is 98.11

After your market order, the Best 5 Ask rates may look something like this
LTP = 105 (The price at which you last trade occured)
Ask rate 105.0 Qty 250
Ask rate 106.0 Qty 4000
Ask rate 106.1 Qty 2200
Ask rate 106.8 Qty 578
Ask rate 109.0 Qty 870

So the answer for your question is 98.11 and not 96 or 95 ot LTP 100 (considering the quanity which you want to buy in market order).
If you are just buying 1000 qty, it will buy at 96.0 itself and LTP becomes 96.0 and Ask rate 96.0 will have 1500 quanity remaining.

The same is the case with selling but in opposite side.
Hope you are clear!

1 Like