A price is an agreement

A price is the number a buyer and a seller agreed on. It comes into being at the moment of agreement and does not exist before it: the number a seller asks for is an asking price, the number a buyer proposes is an offer, and neither becomes a price until the two hands meet. Every number in a record is therefore the trace of a completed agreement — at that number somebody bought and somebody sold. The most common misreading treats a price as the "true value" of a thing. It is nothing of the sort: the number says only where two people met at that moment, and "expensive" or "cheap" are interpretations added afterwards, never words the record itself contains. A price also says nothing about where the next agreement will land. That distinction is the first step of risk literacy: a reader who knows a number is an agreement does not mistake it for a promise.

This content is educational information, not personalised investment advice. The chart examples are illustrative.

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