How to Decipher a Stock Quote
Have you ever heard someone stand up from their computer at work and scream in excitement, “Check it out! My favorite stock is up 10%!”
Okay, so maybe working for a company like InvestingAnswers, I hear that a bit more than most people.
But if you plan to invest, you’ll likely see one page — the one that the person was screaming about — quite often.
It doesn’t matter if you’re Warren Buffett, Suze Orman, or someone looking at stocks for the very first time — this is one financial tool that you will need to know intimately if you want to really know how stocks work.
In fact, you will see one of these pages more often than any other in investing:
The stock quote. Filled with numbers and terms that may seem like a foreign language to most people, the stock quote contains the most basic snapshot of a stock’s characteristics (most importantly, the stock’s price) and some of the company’s financial information.
But reading a stock quote doesn’t have to be confusing — or a waste of time. In fact, there’s a huge up side — read it correctly and it could lead you to a profitable company that’s really worth investingin.
Listed below are all of the terms you’ll see on a stock quote. We’ll decipher the hieroglyphics and tell you what they all mean:
From The Top Of The Stock Quote
Ticker Symbol – Also called a stock symbol or a ticker, this shorthand string of letters identifies thestock. Every publicly traded corporation in the stock market has a unique ticker symbol that’s usually made up of three to four letters and abbreviates the company’s name (although bonds, mutual fundsand ETFs all have ticker symbols, too). To the left of the ticker symbol, you’ll see which market exchange that stock is traded on. In our example, Google’s ticker symbol is “GOOG” and it trades on the Nasdaq market exchange.
Price – This is essentially the stock’s price tag. It’s the amount of money it costs to buy one share. Astock price can change by the second while the stock market is open as buyers and sellers trade. In this example, Google’s stock is trading for a price of $697.25 per share.
Price Change – This is the green or red number next to the stock’s price. It shows how much thestock’s price has changed (in terms of currency and percentage) from the time the market opened today until now. The colors mean something too: Green means the stock price is higher since market opening and red means the stock price is lower since market opening. In our example, Google’s red price change shows the stock is down $7.26, or -1.04% since the stock market opened today.
The Left Column of the Stock Quote
Previous Close – This shows what the stock’s price was when the market last closed (The U.S.stock market officially closes at 4 p.m. EST on weekdays). In our example, Google’s stock price was $704.51 when the stock market closed yesterday.
Open – This shows what the stock’s price was when the market opened this morning (The U.S.stock market officially opens at 9:30 a.m. EST). In our example, Google’s stock opened at a price of $705.00.
Bid –Used mostly by more advanced investors, the bid price is the highest price that a prospective buyer is willing to pay per share. The “x 300″ to the right of the bid price shows how many “lots” of the stock can be sold to the buyer for that price (1 lot = 100 shares). In our example, the bid price says someone can sell up to 300 lots of Google stock for a price of $697.17 per share. Here’s howWall Street traders will say it: “Google shares bidding $697.17 by 300.”
Ask – Also for more advanced investors, the ask price is the lowest price that a seller will accept to sell a share of the stock. The “x 300″ to the right of the ask price shows how many “lots” of the stockcan be bought from the seller for that price (1 lot = 100 shares). In our example, the ask price says someone can buy up to 300 lots of Google stock for a price of $697.40 per share. Wall Street traderswill say: “Google shares asking $697.40 by 300.”