What it is:
A quote is an estimate of price or a price at which one party is willing to buy or sell from the other. In the trading markets, a quote is the bid and ask price for a security.
How it works (Example):
Why it Matters:
Quotes are necessary to inform investors about the prices of securities. The information contained in a quote is sometimes limited; for example, it may not disclose whichmakers are bidding for or the security, whether there are limit orders on the security, or the size of potential trades at a particular price. In other words, quotes do not give the viewer access to the "order book" showing who has an interest in a security and at what price. But quotes do give traders and investors a basic idea of how a security is doing.