When it comes to financial markets, agreements between buyers and sellers are commonplace. These agreements are what allow transactions to take place and drive the movement of prices up or down. In particular, when it comes to securities, the agreement between a buyer and seller on the price is called a trade.

But what about before the trade actually takes place? What is the name for the agreement on the price? This type of agreement is known as a quote.

A quote is a bid or an offer to buy or sell a security at a certain price. The bid is the price that a buyer is willing to pay for the security, while the offer is the price that a seller is willing to sell the security for. When a buyer and seller agree on the same price, a trade is executed.

In some cases, the buyer and seller may negotiate the price of the security. Once an agreed upon price is reached, the quote becomes the trade and the transaction is complete.

It`s important to note that quotes for securities can change frequently throughout the day as the market fluctuates. This means that the agreed upon price for a trade may change if the quote changes before the trade is executed.

Overall, understanding the terminology and mechanics of buying and selling securities is crucial for anyone involved in the financial markets. Knowing what a quote is and how it relates to a trade can help traders and investors make informed decisions and maximize their profits.