A flash price is a price display on a ticker tape that appears when the trading on an exchange is so heavy that the stock prices are not updating in real time. Rather than allow the backlog of prices to run their course and slowly catch up to current activity, the flash price breaks into the data flow and posts the most recent price on heavily traded stocks. Depending on how much trading is taking place at the time, the flash price may be inserted into the tape reading every five to ten minutes until the reporting catches back up to the pace of the trading activity.
The concept of the flash price has been around for many decades. While ticker tape offered a significant improvement over older methods of reporting trading activity, the equipment used to provide the information still had limitations that could create backlogs of reporting market activity in a timely manner. The implementation of the flash price feature made it possible for investors to still receive information on the most popular stocks of the day on some type of regular basis, even if the pace of buying and selling activity was especially brisk. While not as efficient as receiving the data on a real-time basis, the insertion of trading figures for major stocks every five to ten minutes eliminated the need to wait for a lull in the trading activity where the ticker tape would catch up to real time reporting on all recently executed trades. Once the market trading slowed somewhat, the machine could gradually catch up, and trading on the heavy stocks would resume on a real-time basis.
By arranging a means of reporting activity on heavily traded stocks, even when the market activity is unusually heavy, investors can have access to information on heavily traded stocks within a reasonable amount of time. This makes it possible to respond to market conditions, choosing to buy or sell shares of those stocks before the opportunity to profit from the current movement of those stocks passes. While the flash price is less desirable than receiving up to the minute reports on the trading activity, this strategy is better than waiting for long periods of time as the ticker tape continues reporting trades in chronological order, and possibly taking thirty minutes or more to become current.
The incidence of a flash price appearing on ticker tape is somewhat less than in times past. Owing to improvements in technology, the process of receiving data via ticker tape is much faster and capable of keeping pace with most trading situations. Today, trading volumes have to be exceptionally rapid in order to trigger the mechanism to break in and give regular reports on current trading activity on major stocks within the marketplace.