Reading Stock Quotes
Date Added: June, 2001
By Chris Stallman
| E-mail
"Hi, I am a young
investor. I've been looking around on the Internet a few stocks
that I have heard of such as Disney and Nike. But I don't understand
what all this confusing information is. Can you help me?"
Our Response:
Absolutely...of course we can help. We would like to
commend you on your decision to start investing at such a young
age and we're glad that we can help you.
I'm sure most people feel confused when they read
a stock quote for the first time but once you get the hang of it,
it gets much easier to understand.
We're going to outline a few things you might find
on a stock quote:
Last Trade: This
is a number that tells you what the last trade of the day for that
stock was. For example, if this number was 47.25, then the person
bought each share of stock for $47.25. This number gives you an
idea of what each share of stock costs.
Change: This
is usually a number (and/or percent) that tells you how the stock
did that day. If the stock went up, you'll see a positive number
such as +1.5, meaning
the stock went up 1.5 points that day.
Volume: This
is the number of shares that traded during that trading day. This
gives you an idea of how many people were buying and selling shares
that day.
Bid/Ask: Without
trying to get into too much detail, the bid price is the price that
a person who wants to sell their shares can sell it at. The bid
price is the price a buyer would have to pay in order to buy the
stock.
Open: This
is the price that the stock opened at in the morning of the trading
day.
Market Capitalization: This
number tells you how much all the shares of stock are worth.
P/E Ratio: This
number gives you an idea of how "cheap" or "expensive"
the stock is. This number is found by dividing the price by the
amount of money the company earned per share.
You can read more about them
by clicking here.
Dividend Yield: This
is the percent return that you can expect to be paid out each year
in the form of dividends. For example, if XYZ stock has a dividend
yield of 1.2% and you invested $1000 in it, you would get about
$12 in dividends.
Market/Exchange: This
tells you what stock exchange the stock is traded on. This might
be the New York Stock Exchange (NYSE), the National Association
of Securities Dealers Automatic Quotation (NASDAQ), American Stock
Exchange (AMEX), or the Over the Counter exchange (OTC).
We hope this answered a few questions about the information
found in stock quotes.
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