This blog post is dedicated to helping people understand CMP, a term commonly used in the stock market. The stock market is much larger than any other financial market. For those starting, there are many unfamiliar terms to learn, and CMP in share market is one of them.
Experts using the term “CMP” while discussing TV shows, news, webinars, or social media platforms can confuse what they are mean by CMP in share market.
Therefore, this post hopes to provide a complete understanding of what is CMP in share market, CMP meaning in stock market, how to find CMP in stock market, etc.
What is CMP in share market?
CMP full form in stock market is the Current Market Price. It is the price or value of a share or security at the present moment.
CMP refers to the current market price at which the stock trades on an exchange. (NSE, BSE)
The CMP in stock market of a share is essential to investors or traders, as it can tell them what the price of a share is at that particular moment.
As the prices of stocks are continually changing, traders may not be able to purchase as many shares as they want at the current market price. But most of the time, stock market analysts advise on whether to buy or sell at the current market price. So it would be best to consider CMP before buying or selling stock.
How To Find CMP in share market (Current Market Price)?
I hope the above explanation clarifies CMP meaning in share market. Now let’s see how to find CMP in stock market.
Many sources, such as financial blogs, financial media, and investing platforms, can provide the current market price of listed stocks. Additionally, if you have a broker, their trading platform will also display the market price of the stock.
For example, I am using Google Finance to find stock market quotes.
To find the current market price of a stock, simply type in either the ticker symbol or the company’s name in the search bar and hit enter. The current market price of the stock should be visible below.
The CMP value of Tata Consultancy Services Limited is Rs. 3,222.20.
Note: It is essential to remember that the market price can fluctuate slightly between when you make your order and when it is executed. If your order is large enough, it can even cause the price to move.
The cost of less liquid stocks may fluctuate significantly, especially during times of high market volatility. So it can lead you to pay more or less when purchasing stocks or earn more or less than you intend when selling them.
One may be curious about what happens to the CMP that preceded the current one in the stock market study. In addition, the CMP, known as the LTP, must be included to gain a better understanding of this.
What is LTP in Stock Market?
LTP stands for “Last Traded Price” and is also an essential concept in trading. It is the price at which the most recent transaction of a particular asset has been carried out. Traders commonly use LTP as part of their decision-making process when deciding to buy or sell an asset.
I hope you also comprehend the concept of the Last Traded Price(LTP) in the stock market or LTP means in trading.
Now, if the CMP in share market is the current market price the share is trading at, and the LTP stands for the stock’s last traded price, wouldn’t they both effectively represent the same thing? The answer is not entirely. Let’s take a deeper look to understand why.
The difference between LTP and CMP in Share Market
The Current Market Price is distinct from the Last Traded Price in that it reflects the most current market value of a stock or commodity. The Last Traded Price refers to the price of the most recent transaction for that particular security.
For example, Mr. A wants to buy a TCS stock. He visits his broker’s trading platform and checks at what price TCS is trading. Suppose the price of a stock is 3000, and LTP for a stock is 2999.50 on screen, which is the price Mr. A can purchase. Then that is the CMP for stock. For a seller, the price Mr. A offers to purchase is the CMP.
Since Mr. A has yet to execute his trade, the price is the CMP in the share market. When Mr. A finally executes the trade, the price he pays for the stock will be the LTP.
Other Important Terms Related To CMP in Share Market
Let’s delve deeper into the world of stock trading and discuss some other concepts related to CMP in share market, such as Limit orders, Market orders, or Stop orders. I will explain these terms in-depth and provide examples for a better understanding.
Stop Orders
Stop orders are a type of order placed with a broker to sell or buy a security when it reaches a specific price. They are typically used to limit losses or protect profits. Stop orders are not guaranteed and may be subject to slippage, which means the price at which the order is filled may be different than the stop price.
To know more about stop orders, read this blog post: What is Trigger Price in a Stop Loss Order? – Explained.
Example: Suppose Mr. B has ten Tata Consultancy Services Limited shares, which Mr. B purchased for RS. 3,000 each share, a total of 30,000 RS of investment.
After a few days of his purchase, the price of these shares may start to decrease. In such a case, Mr. B can set a stop order with his broker, instructing the broker to sell the stock if the price falls below 2,090 RS.
As a result, the loss per share is now limited to RS 10.
Market orders
A market order is an order that enables a trader to buy or sell a security at the current market price. This type of order is usually executed immediately.
Since it does not require the trader to specify the exact price of the security, market orders are often used by traders who want to buy or sell a security quickly since they will be filled at the best available price.
Example: Suppose Mr. X wants to buy Reliance Industry LTD, which is currently trading at 2,100. Mr. X placed the market order, and his request will be carried out immediately. However, there is no guarantee that the stock will be purchased at the 2,100 RS, which is the ‘ask’ price of the buyer (Mr. X).
This is because the market price changes every second, and by the time Mr. X places the trade, the market’s last traded price may have changed.
Limit Orders
A Limit Order is an order that allows traders to specify the maximum amount they are willing to pay for a security or the minimum amount they are willing to accept for sale. This type of order helps investors to control their entry and exit points and can be a helpful tool to protect against sudden market movements.
Example: Suppose you want to sell 51 shares of Sun pharma and gain as much as possible by selling those shares. Then you can instruct your broker to sell these 51 shares at a high price for the current trading session.
Conclusion
At first, the acronym “CMP” may seem perplexing when you encounter it on your stock trading app alongside other terms (Terms like bo id, ce and pe in stock market).
However, CMP meaning in share market, is the Current Market Price. It helps investors and traders to understand at what price a stock is trading on the stock exchange. It is one of those terms frequently used in the stock market.
I hope I have provided an adequate explanation of CMP in share market, and now you have a better insight into the concept.
Frequently Asked Questions Related to CMP in Share Market
What is CMP in share market?
CMP means Current Market Price in the share market, The present value of a share.
What is LTP in share market?
LTP means “Last Traded Price” in the share market, The value at which a share was traded lastly.
What Is Limit In Order?
A limit order is an instruction given to a broker to buy or sell a security at a specified price.
How to find current market price?
You can google for the current market price of a stock or check on an exchange’s official site or broker’s trading platform.
What Is CMP In Trading?
CMP meaning trading is “Current Market Price.”
