How to Read a Stock Quote - Made Easy!
Have you ever heard someone stand up from their computer at work and scream in excitement, "Check it out! My favoriteis 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 need to know intimately if you want to really know how stocks work.
In fact, yousee one of these pages more often than any other in :
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 's characteristics (most importantly, the 's price) and some of the company's financial information.
But reading a 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 investing in.
Listed below are all of the terms you'll see on aquote. We'll decipher the hieroglyphics and tell you what they all mean:
Hint: Click on each term's name for more information.
From The Top Of TheQuote
corporation's name. If you were to buy shares of this , you would own part of this company. Our example shows Google Inc.Name -- Usually toward the top of the quote is the
Ticker Symbol -- Also called a stock symbol or a ticker, this shorthand string of letters identifies the . Every publicly traded corporation in the 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 funds and ETFs all have ticker symbols, too). To the left of the ticker symbol, you'll see which market exchange that 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 money it costs to buy one share. A price can change by the second while the market is open as buyers and sellers trade. In this example, Google's is trading for a price of $697.25 per share.'s price tag. It's the amount of
Price Change -- This is the green or red number next to the 's price. It shows how much the '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 price is higher since market opening and red means the price is lower since market opening. In our example, Google's red price change shows the is down $7.26, or -1.04% since the market opened today.
The Left Column of theQuote
Previous Close -- This shows what the 's price was when the market last closed (The U.S. k market officially closes at 4 p.m. EST on weekdays). In our example, Google's price was $704.51 when the market closed yesterday.
Open -- This shows what the opens at 9:30 a.m. EST). In our example, Google's opened at a price of $705.00.'s price was when the market opened this morning (The U.S. market officially
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 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 for a price of $697.17 per share. Here's how Wall Street traders 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 accept to sell a share of the . The "x 300" to the right of the ask price shows how many "lots" of the can 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 for a price of $697.40 per share. Wall Street traders say: "Google shares asking $697.40 by 300."
1 year Target Est. -- Want to see how much a analyst's forecast of what the price be one year from today based on the company's earnings forecasts and other factors. Before you get too excited, know that every analyst has a different one-year target estimate and forecasts can vary widely, so take them with a grain of salt. In this example, the analyst projects Google's price grow to $799.32 one year from today.be worth in the future? The one year target estimate is an
Beta -- This Greek word is actually a way to measure how risky a is. It shows how volatile a 's price movement has been compared to the rest of the market over the past 12 months. A with a beta of 1.0 means the 's price move alongside the market (for example, if the market fell or gained 10%, this 's price has also tended to fall or gain 10%). A beta over 1.0 means the 's price swing more violently than the market, and a beta less than 1.0 signals that the 's price swing less than the market. In our example, Google's beta is 1.23, which means that if the market goes up or down 10% over the next year, we can expect Google's to go up or down 12.3%.
Next Earnings Date -- This is simply the date that investors can expect the company to publicly release its next earnings report. In our example, Google is expected to release its next earnings report on January 22, 2013, which show us how profitable they were over the quarter.
The Right Column of theQuote
Day's Range -- This shows the highest and lowest prices investors paid for theover the business day. In our example, Google's price over the day has been as low as $696.02 and as high as $705.34.
52 Wk Range -- This shows the highest and lowest prices that investors paid for theover the last 52 weeks. In our example, Google's price has been as low as $556.52 and as high as $774.38 over the past year.
Volume -- This tells you how many shares of that particular have been bought or sold throughout the trading day. Volume is incredibly important to traders, as the lower the volume of trades, the more difficult it becomes to buy or sell shares when you want to, and at the price you want. In our example, Google has been traded 970,625 times over the course of the day.
Avg Vol (3m) -- This shows you the average daily volume of that analysts believe that volume can serve as a warning signal as to whether a is on the verge of breaking into upside territory (high volume) or into a downside trend (low volume). In our example, investors traded an average of 2,386,360 shares of Google per day over the past three months. That means with today's volume of 970,625 trades, it's been a relatively slow trading day for Google.over the past three months. Technical
Market Cap -- Short for market capitalization, this is the entire company's market value, or how much money the shareholders have invested in the company at this very moment. If you wanted to buy the entire company, this is essentially how much it would cost. It's calculated by multiplying the 's price by the total number of company shares that are owned by shareholders (shares outstanding). In our example, Google's market cap is $299.08 billion -- large enough to consider it a "large cap ."
P/E (ttm) --Called the price-to-earnings ratio (P/E), this is a basic measure of how well a company is performing. It compares a 's current price to how much the company earned (made in profit) over the past twelve months ("ttm" means trailing twelve months). Put another way, if you were to buy the , it shows how much money you're paying (per share) for every $1 in earnings (per share) that company makes -- the lower the P/E ratio, the better the value you may be getting for your purchase (learn more about P/E here). In our example, Google has a P/E of 21.85.
EPS (ttm) -- Short for "earnings per share," EPS tells an investor how much profit the company made over the past twelve months, divided by the total number of shares that are being traded. For example, if a company earned $10,000 and there were 1,000 shares of the company owned by shareholders, that company earned $10 per share ($10,000 / 1,000 shares = $10 EPS). Investors like to see companies with a rising EPS year after year as it generally shows the company's profits are growing. In our example, Google earned $31.91 per share over the past year.
Div & -- This shows how much money a company pays its shareholders annually in the form of dividends (per share). Google does not currently pay its shareholders a dividend, but if it had an annual dividend of $7 per share, you could expect to receive that much every year in dividend payments from the company. The "Yield" part shows how much of an annual return that dividend payment would give you for your investment. For example, if Google shares were to cost $700 to purchase and the has an annual dividend of $7 per share, then its dividend yield would be 1% ($7 divided by $700 is 1%).
TheAnswer: The quote offers investors a snapshot of a and the company it represents. It's a quick way to check a 's current price, its price trends (over days, months or years), its risk, its company's size and its value (how much you're getting in earnings or dividends in return for buying shares of the ). If you become a regular investor, you're likely to look at quote pages more often than any sort of financial statement, so it's good to become familiar with the terms above.
Thequote is a great starting point before you dive further into a company's financials and ultimately make your investing decision.
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