Quotes, Executions, Opening and Closing Prices: An Easy Guide to Reading Prices in a Stock App

You tap "Buy" in your stock app, but the order just sits there waiting, and you start to wonder whether you actually bought anything. Placing an order doesn't mean you've bought the stock right away. A trade only happens when your order meets a sell order with matching terms.

Here, an order put up to buy or sell is called a "quote," and a trade that actually takes place is called an "execution." Once you also tell apart the "opening price," where the day starts, and the "closing price," where it ends, stock screens become much easier to read.

Quotes vs. Executions: Orders vs. Actual Trades

Even if a used item has a price tag on it, the deal isn't done until someone buys it. Stocks work in a similar way. An order to buy is called a "bid," and an order to sell is called an "ask." The exchange matches the two sides according to a set order of priority.^{1Source 1Korea Exchange, Execution Method for Single-Price Trading}

With quotes, you need to look at price and quantity together. Even if someone is willing to sell at the price you want, if there aren't enough shares for sale, you may only be able to buy part of the quantity you ordered. An order that hasn't traded at all is "unfilled," and an order where only part has traded is "partially filled."

So to know how many shares you actually bought, look at the filled quantity, not the order quantity. The order price is the condition you offered, and the execution price is the price you actually traded at.

Execution Order: Price First, Then Time

If many people want to buy the same stock, who gets to buy first? Basically, the order willing to pay a higher price comes first. On the selling side, the order willing to sell at a lower price goes ahead. This is called the "price priority principle."^{1Source 1Korea Exchange, Execution Method for Single-Price Trading}

If the prices are the same, the order that came in first trades first. This is the "time priority principle." If someone placed an order at the same price before you, your order may keep waiting even while trades are happening.

There is an exception, though, when the opening price is set at the "upper price limit," the highest price the stock can rise to that day, or the "lower price limit," the lowest price it can fall to. At the upper limit, the trading volume may be divided up and allocated among buy orders, and at the lower limit, among sell orders.

What Opening and Closing Prices Mean: Where the Day Starts and Ends

In Korean, the opening price is called 시가 (si-ga), and the "si" here means "start," not "market." The opening price is the price of the first trade in the regular session. It isn't set just by a price someone wrote into an order before the market opened.^{1Source 1Korea Exchange, Execution Method for Single-Price Trading}

The closing price is the price set when the regular session ends. Trading can continue after the regular session, so a price traded in the evening may differ from that day's regular-session closing price. Read the opening price as the day's starting price and the closing price as the regular session's final price.

Single-Price Auction vs. Continuous Trading

Orders are sometimes traded as soon as their terms match, and sometimes collected for a set period and traded all at once. A single-price auction collects orders and then trades them at one price. The Korea Exchange uses this method to set the opening price.^{1Source 1Korea Exchange, Execution Method for Single-Price Trading}

Even if many people place orders at different prices, the orders that get traded at that point all receive the same execution price. While orders are being collected, your order may show as received, but the trade isn't done yet.

Continuous trading matches orders with fitting terms as they come in. Since a trade happens each time orders are matched, the execution price can vary. If a single-price auction collects orders and trades them together, continuous trading connects orders every time two tradable orders meet.^{2Source 2Korea Exchange, Execution Methods and Examples: Mid-Point Orders}

How to Read Trade Results on the Order Screen

On the order screen, quotes are the terms people have put up to buy or sell. The price and quantity you actually bought appear in your execution history. When you want to know where the day started and ended, look at the opening and closing prices.

After placing an order, check the filled quantity to see how much has traded. So who does the order you place in the app pass through on its way to the exchange?