CMP (Current Market Price) is the latest traded price of a stock on the exchange (NSE/BSE). It updates tick-by-tick during market hours and is the most immediate reference point for valuations, returns, and order placement.
Introduction
If you’ve ever checked a stock quote on NSE or BSE, the first figure you notice is the CMP. It moves in real time and drives every buy/sell decision. This article explains what CMP means in India, how it’s determined, how it differs from related prices (LTP, bid/ask, previous close), and how investors actually use it—from valuation ratios to stop-losses.
CMP Meaning and How It’s Determined
Definition:
CMP = the most recent transaction price at which a share changed hands on the exchange.
Price discovery:
- Order book matches market and limit orders via the exchange’s electronic system.
- When a buy and sell order match, a trade happens; the trade price becomes the new CMP.
- CMP can change multiple times per second in liquid stocks.
Key points:
- NSE/BSE publish live quotes during market hours (typically 09:15–15:30 IST, excluding pre/open and post-close sessions).
- During pre-open, an equilibrium price is discovered; the first regular-session trade sets the initial CMP.
- After hours, the displayed CMP is effectively the day’s LTP (Last Traded Price) until the next session.
CMP vs Other Common Terms
| Term | What it is | How it relates to CMP |
|---|---|---|
| LTP (Last Traded Price) | The price of the most recent trade | In practice, CMP = LTP during the session; post close, LTP is the “CMP” shown until the next trading day |
| Bid / Ask | Highest buy order / Lowest sell order in the book | If bid ≥ ask, trades occur and CMP updates |
| Previous Close | Closing price from last session | Used to calculate today’s % change vs CMP |
| Open, High, Low | Today’s first trade, intraday high & low | CMP will lie between low and high for the day |
| 52-Week High/Low | Highest/lowest price in past 52 weeks | Context for where CMP sits in the longer-term range |
Why CMP Matters for Investors
- Instant valuation anchor:
- Market Cap = CMP × Shares Outstanding
- P/E Ratio = CMP ÷ EPS (TTM)
- Dividend Yield = (Dividend per Share ÷ CMP) × 100
- Measuring returns:
- Absolute Return (%) = [(CMP − Buy Price) ÷ Buy Price] × 100
- CAGR (if multi-year):
CAGR=(CMPBuy Price)1/n−1\text{CAGR} = \left(\frac{\text{CMP}}{\text{Buy Price}}\right)^{1/n} – 1
- Risk management:
- Stop-loss levels and trailing stops are defined off CMP.
- Position sizing often uses CMP to cap risk per trade (e.g., risk ₹X per share × number of shares).
- Relative strength & trend context:
- Comparing CMP to moving averages (e.g., 50-DMA/200-DMA) helps gauge trend direction.
- CMP near 52-week high could indicate momentum; near 52-week low may suggest weakness or value—context matters.
Practical Examples
1) Quick return check
- You bought HDFC Bank at ₹1,400.
- CMP = ₹1,575.
- Return = (1,575 − 1,400) ÷ 1,400 = 12.5% (before taxes/charges).
2) P/E using CMP
- CMP (TCS) = ₹X, EPS (TTM) = ₹Y (from company/AMFI factsheet).
- P/E = X ÷ Y.
- Compare with sector P/E (IT Services) for context—avoid apples-to-oranges.
3) Dividend yield snapshot
- Declared annual dividend ₹48/share; CMP = ₹3,200.
- Dividend Yield = (48 ÷ 3,200) × 100 = 1.5%.
Note: For decisions, always use up-to-date CMP from the exchange/broker and verify EPS/dividends from company filings or AMFI/SEBI sources.
How Traders Use CMP During the Day
- Breakout rules: Buy when CMP crosses above yesterday’s high with volume.
- Pullback entries: Enter near CMP ≈ 20-DMA in an uptrend.
- Intraday risk: Place stop a fixed % below CMP (e.g., 0.5–1.0% for liquid large caps).
- Options: CMP directly affects option premiums via intrinsic value and implied volatility.
CMP Nuances & Common Misconceptions
1) “CMP shows a fair value.”
Not necessarily. CMP is just the last agreed price. Fair value is an estimate from research models, not the same as CMP.
2) “CMP and LTP are different numbers.”
In Indian quoting, they’re functionally the same during market hours. Post-close, LTP acts as the displayed CMP until next open.
3) “Low liquidity doesn’t affect CMP.”
It does. In illiquid small caps, wide bid-ask spreads mean CMP can jump erratically on small trades.
4) “Upper/Lower circuits don’t matter to CMP.”
Stocks with price bands (as per exchange/SEBI framework) can freeze CMP at the circuit limit if demand/supply is one-sided.
Reading CMP the Right Way (Checklist)
Before buying:
- Check bid-ask spread versus your order size.
- Compare CMP with intraday range and 52-week levels.
- Validate CMP vs moving averages and recent results/news.
- Re-compute key metrics: P/E, dividend yield, market cap.
Before selling:
- Gauge if CMP breach is noise or trend break.
- Align exits with stop-loss/trailing stop rules, not emotion.
- Cross-check CMP impact on taxes (short-/long-term capital gains under Indian rules).
Simple Calculations Using CMP (at a glance)
- Return (%)
CMP−Buy PriceBuy Price×100\frac{\text{CMP} – \text{Buy Price}}{\text{Buy Price}} \times 100
- Stop-loss price (e.g., 8% max loss rule)
Stop=Entry Price×(1−0.08)\text{Stop} = \text{Entry Price} \times (1 – 0.08)
- Position size (risk ₹5,000 per trade, stop ₹20 below CMP)
Qty=5,00020=250 shares\text{Qty} = \frac{5{,}000}{20} = 250\ \text{shares}
- Market cap
Market Cap=CMP×Shares Outstanding\text{Market Cap} = \text{CMP} \times \text{Shares Outstanding}
Visual Cue: Where Does CMP Sit?
The illustration above shows an example stock with CMP plotted against its 52-week low, previous close, and 52-week high using the Endovia Wealth palette. This helps you benchmark CMP in seconds.
Download the chart
FAQs
Q1. Is CMP the same on NSE and BSE?
Usually very close, but slight differences can exist due to independent order books. Many brokers show the exchange you’re quoting.
Q2. Why does my app show a different CMP from a website?
Latency and refresh intervals differ. Always rely on your broker/exchange feed for trading decisions.
Q3. Does CMP include brokerage or taxes?
No. CMP is a trade price. Your net execution price differs due to brokerage, STT, exchange fees, GST, and stamp duty.
Q4. Can CMP be manipulated?
In illiquid counters, small trades can move CMP more. That’s why SEBI/exchanges monitor surveillance and can impose price bands or additional margins.
Q5. What’s the best time to trust CMP?
CMP is most informative during regular hours with healthy volume. Avoid over-interpreting CMP ticks in illiquid names or pre/post sessions.
Conclusion
CMP is the heartbeat of a stock’s live quote—the last price at which buyers and sellers agreed. Used intelligently, it anchors valuation, risk control, and execution. But remember: CMP is not fair value; it’s a real-time consensus that can deviate from fundamentals, especially in low-liquidity names. Smart Indian investors view CMP in context—order book, volumes, ranges, and fundamentals—before acting.