Trading is Easy if you know the shorts forms related to it. Whenever you listen to experts on TV or webinars they often use a term “CMP”. Every beginner one or other day think that What is CMP in Share Market or cmp in trading? Here is the answer to you question with best explanation.
Table of Contents
What is CMP in Share Market Or CMP in Trading?
When it comes to stock trading, cmp meaning in stock market is the current market price. This is also described as current market value of any stock. It refers to the current market price at which stocks are trading on Exchange(NSE, BSE, etc).
Since stock rates are constantly fluctuating, you may not be able to purchase as much shares as you want at the current market price. However, Most of the stock market experts will give calls for buy or sell according to Current Market price.
How to find Current Market Price(CMP)?
After discussing what is CMP in share market? lets check out how to find it. The current market price of a share is the rate that you’ll frequently see mentioned on financial blogs, financial media networks and investment platforms.
If you want to find out the current market price of a share so you can decide whether to buy or sell it, look up the ticker symbol on a financial details or trading site of your preference.
If you want to purchase or sell a stock at the current market price, you’ll need to place a “market order” with your exchange.
Note
Please remember that the market price will fluctuate marginally between the time you place your order and the time it executes. If your order is massive enough, it will cause the price to change.
These variations can be more severe with less traded shares and especially during volatile trading periods. It will lead you to pay less or more than you anticipate when purchasing stocks or earn less or more than you intend when selling them.
Other Important terms
After discussing what is CMP in Share market & how to find it. Lets discuss some other related terms to CMP.
Limit Orders
You can place a limit order if you’re worried about stock price volatility impacting your trading prices. In this scenario, you’re indicating a minimum price for selling or a maximum price for buying, as well as instructing your broker not to consider a lower price on your behalf.
Example
You could instruct your broker to sell 100 shares of a specific stock at a price of at least INR 1000 per share, or to buy 100 shares at a maximum price of INR 1000 per share.
Limit orders dictate what should happen if a transaction can’t be completely completed, such as if there are n’t sufficient shares accessible at the price you want, and how long an order can stay in place until the trader basically gives up.
Please remember that if an order takes longer to fill, particularly if it takes several days, your broker may charge you several commissions, reducing your net profits from the trade.
Market Order
A market order is an instant purchasing or selling of a stock. This form of order ensures that the order will be fulfilled, but it does not guarantee the price of fulfilment. A market order will typically complete at or around the current bid (sell order) or ask (buy order) price.
Example
Consider the current market price of Tata Coffee is Rs 190. You acquire the shares at this price by placing a market order. Your request will be carried out right away. However, there is no assurance that the stock will be purchased at the Rs 190 ‘ask’ price.
This is due to the market’s unpredictability; prices change every second. By the time you place your order, the market’s last-traded price may have changed. Nevertheless, if the stock you’re purchasing is a well-traded or “liquid” stock, you’ll get a price that’s similar to your bid price.
Stop Orders
You may also place a stop order, instructing your brokerage to sell or buy a share if its value falls below or rises above a specific level. For example, you might instruct your broker to sell stocks if the value of a stock rises over Rs. 75, or to buy shares if the value drops under Rs. 50.
Please remember that if the price of a stock is quickly increasing or declining, a stop order may be executed at a price that is substantially higher or lower than your chosen cap.
Example
For a better understanding, a stop-loss order example may be constructed. Assume shankar has 40 shares of Reliance Industries, which he purchased for Rs. 2100 each share, resulting in a INR 84,000 investment.
The prices of these shares may begin to decrease fast in the market due to a variety of factors. In such a case, Rahul might issue a stop-loss order with his broker, instructing him to sell the stocks if the price falls below INR. 2070.
As a result, the losses on this trade are limited to Rs. 30 per stock.
Summary
CMP in Stock market is some of the major terms which are used frequently. Most of the analysts give calls according to the CMP.
This is all from our side regarding CMP in Share market. Although, if you have any doubts you can just comment below.
Other Interesting blogs related to What is CMP in Share market?
Read : What is LTP In Share Market?
Read : Difference Between Stock Market and Share Market
Read: Best books for stock market for beginners in India
Read: Best Movies on Stock Market
FAQ
What is CMP in Stock Market?
CMP means Current Market Price in Share market.
How to find current market Price?
You can check NSE, BSE or your brokerage platform.
What is LTP in Share market?
LTP means Last Traded Price in share market.
What is Limit in order?
Limit order is the price on which you want to buy stocks.
What is CMP in trading?
cmp meaning in stock market is Current Market Price.
