What is the mid price?
A general market value for an asset which is calculated by taking the average of the current bid and ask prices being quoted.
Key takeaways
Mid price is a general market value for an asset calculated by taking the average of the current bid and ask prices, also known as mid-market price.
The mid price is typically quoted when providing a single number for a security price and is the price commonly found in newspaper security listings.
Due to exchange prices being rounded to the nearest tick (valid tradable price), the mid price value may not be an exact average of the bid and ask prices.
For illiquid securities traded through matched bargain systems where bid prices may distort the mid price, the last traded price is quoted instead as an alternative.
Where have you heard about mid price?
If you look up security prices in newspapers, the price quoted is likely to be the mid price. It may also be called the ‘mid-market price’.
What you need to know about mid price.
The mid price value is typically quoted when providing a single number for a security price. As exchange prices are rounded to the nearest tick (valid tradable price), the mid price value may not be an exact average of the bid and ask prices.
For illiquid securities that are traded through a matched bargain system, the bid price may be unrealistic and can distort the mid price. In this situation, the last traded price (i.e. the price of the most recent trade) may be quoted instead.