Price Change

Written By
Paul Tracy
Updated September 30, 2020

What is a Price Change?

In the stock market, a price change is the difference in trading prices from one period to the next or the difference between the daily opening and closing prices of a share of stock.

How Does a Price Change Work?

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 Does a Price Change Matter?

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.