What it is:
How it works (Example):
For example, let's say Company XYZ shares opened at $25 this morning and closed at $24.
The price change is -$1, or -$1/$25 = -4%.
Why it Matters:
Price changes are a core component of financial analysis, and predicting price changes can be as, if not more, important than an actual price change.
It is important to remember, however, that percent-based price changes are useful only in the context of the number of dollars involved.
A 75% change in the price of a box of cereal, for example, may only involve a few dollars while a 75% change in the price of Berkshire Hathaway may involve thousands of dollars.