When you examine an individual stock in an exchange, you are looking at a stock quote. If you’re holding a newspaper in your hand, you’re looking at a static stock quote, either from the end of that day or the day before.
However, you can get actively-updated quotes throughout the day online at dozens of sites. If you bought stock through a broker, that brokerage will give you access to quotes. Many brokerages and stock websites have mobile device apps too, so you can check on the fly.
Getting an updated quote is important if the stock is fluctuating quite a bit in a short time. This happens during mergers, acquisitions, product releases, big announcements, and external events that affect the price of the stock rapidly.
Essential Elements of a Stock Quote
Within each stock quote, you’ll find a table of figures, and that’s probably where you’re getting lost when trying to read reports. Keep in mind not all stock quotes look the same. Newspapers tend to give less information than online resources.
Nevertheless, if you know what’s behind each heading, you can read any quote. Let’s break down what those mystical columns mean.
52W High (52-Week High)
This is the highest price at which the stock has traded for the last 52 weeks or one year. This figure usually excludes the previous day’s numbers.
52W Low (52-Week Low)
This is the lowest price the stock has seen over the previous 52 weeks. Again, this is exclusive of trading the day before.
Simply put, the stock’s name that is being traded. Because it has to fit in a small space, this isn’t always the full name of the company but a slight abbreviation.
Usually, this is a name for a common stock, unless there are symbols next to it that indicate it’s preferred. Preferred stocks typically have benefits like paying dividends to preferred holders first before other shareholders.
Every company that is publicly traded has an abbreviated name for its unique ticker symbol. Stocks on the New York Stock Exchange have three-letter symbols, while Nasdaq stocks have four-letter tickers.
If you are looking for stock quotes online, you will usually be asked to enter the ticker symbol to search for the report.
In classic films, you may see ticker tape with these symbols spewing stock information (and being used in ticker-tape parades). Nowadays, you’ll have an electronic ticker tape scrolling across the bottom of your TV screen during the stock market news.
Div (Dividend per Share)
Not all stocks pay dividends, which are additional shares of the stock paid out periodically to shareholders. Often dividends are used to reward stockholders when a company is low on cash but growing. If a particular stock doesn’t pay dividends, the column beside the stock will be blank.
Yield Percent (Dividend Yield)
This is another column that only contains information if a stock pays dividends. This indicates the return on the dividend as a percentage. This percentage is calculated as such—divide the annual dividends per share, by the price per share.
P/E (Price/Earnings Ratio)
This is the current stock price divided by the earnings, per share over the last four fiscal quarters. This figure is important in determining the value of a stock and the trajectory of a company.
Normally, P/E ratios are in the range of about 13 to 15. Numbers much higher than this usually mean a company is growing quickly. They can demand a higher share price because of expected growth in the future.
Vol 00s (Trading Volume)
This is the number of total shares traded in a day. On the end of a number, tack “00” to get the actual volume.
High (Day High)
This is the highest price at which the stock traded on that given day.
Low (Day Low)
This is the lowest price anyone paid for that stock on that day.
The closing price, or last price, is the final price the stock was trading at when the market that day closed. If you see this number in boldface type, it means the stock was up or down by at least 5 percent from the previous day’s closing price.
Note that the price at the close is merely an estimate of what you would pay to buy the stock first thing the next day. The price of a stock can change even after the market closes, due to events in the market prior to the next day’s opening.
Net Chg (Net Change)
This is how much a stock changed from the previous day’s price. A plus (+) or minus (-) sign in front of the currency amount indicates which way the stock trended.
Additional Quote Elements
The basic stock figures above are what you’ll see when taking a quick look. Below are some additional stock notations you might find when viewing quotes, especially when doing online trades.
When you read stock quotes online or magazine articles about certain stocks, you may also encounter stock tracking. Stock tracking gives you stock trends, which is usually more important than quotes from a single day.
You want to know how a stock has performed over the last week, month, year, or even several years. Of course, a trend isn’t a guarantee, but it’s an indicator of how a stock is likely to perform barring unforeseen circumstances.
Frequently, you’ll see a stock graphed as share price as a function of time. Most stock graphs look like a mountain range, with peaks and valleys. You want to try to time your trades to coincide with those dynamics—generally, it’s ‘buy low, sell high’.
If you are looking online, you can click on segments of the graph to get a detailed picture for that day or week. Most phone apps for stock trading and monitoring offer tracking graphs.
Stock tracking, by the nature of its timeline, also lets you separate more volatile stocks from sedate ones. If a risk isn’t your thing, look for stocks that trend gradually rather than those that shoot up and down. And do your homework to best predict market changes.
Summing It Up
Trading stocks and investing in the stock market can be fun and profitable, but you need to know how to read stocks first. Use this guide to help you interpret stock reports that interest you.
Remember that stock prices and the entire market can change on a dime. Wars, leadership changes, natural disasters, and the like can cause big upsets.
Stock quotes are like snapshots of the market at any point in time. Use that snapshot to your advantage, anticipate change as much as possible, and be flexible to best profit from the stock market.
Featured Image via Pixabay