Should pricing be dynamic?

In my discussions on pricing (a life long interest), someone asked me to comment on monthly vs. weekly pricing since buyers are usually only interested in the monthly average.

In weekly or biweekly pricing, there are usually 4 to 8 pricing points while there is only one pricing point for a monthly price. In recent times, most buyers and sellers have liked the transparency that multiple price points offer, while a single monthly, or even quarterly price, has that single pricing point.

Why does that matter. Those in favor of monthly or quarterly pricing say it adds stability to the market. Those in favor of a more dynamic (daily, biweekly, or weekly) say it solves a major problem.

Assuming that the commodity is sold frequently during the month, should greater emphasis to placed on the direction of the price at the end of the pricing period or should it be an average of all the transactions during the month? Also, should the price be weighted on tonnage or the number of transactions? The mean or the mode?

It’s up to all the parties to make a decision is best for them.

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